Here is a link to how to upgrade your 3.x configuration to a 4.x configuration within IDS MC (part of VMS).
http://www.cisco.com/univercd/cc/td/doc/product/rtrmgmt/cw2000/mgt_ids/idsmc12/ug/ch05.htm#894213
When the Update button is selected, the IDS MC will attempt to convert all of the 3.x configuration to 4.x. Ths IDS MC will successfully convert most configurations from 3.x to 4.x. However, I have heard several areas where parts of the 3.x configuration was not successfully converted to version 4.x. So you will need to compare the converted 4.x configuration to your 3.x configuration prior to deploying it to determine what may be missing or needs to be corrected.
The main areas that I have heard of having problems are modifications to signature parameters and custom signatures. This is because several engines changed between 3.x and 4.x, and the IDS MC is not sure what to do with those 4.x modified parameters.