I suggest a full backup before each f/w update and leaving the HDD's in place. As per 'fordem', there should be no requirement to reform the disk(s).
In the earlier f/w that contained EXT2 & EXT3, it was necessary to reformat the disks if they were formatted in EXT3 mode as f/w support for EXT3 had been removed by D-Link Engineering ... although I'm not certain why as EXT3 is apparently preferred over EXT2.
Cheers,