Upgrading with future iterations?

It depends on the update. Sometimes you need to replace all files (major updates) but very often you just need to replace some files. A list of all updated files can be found in version.txt (can be found in the themeforest zip file) and Kriesi also posts the change log here: http://themeforest.net/item/enfold-responsive-multipurpose-theme/4519990 (i.e. the last update was a major update and you need to replace all files).

Make a backup of your modified thee files first, then re-apply the changes to the updated files and upload them.

You can use child themes too. The reason why I’m not always recommending them is

1) Many users are not familiar with filters, function overrides, etc. and I don’t have enough time to explain the concept behind it. On the other hand users who know what they’re doing will use a child theme anyway.

2) Sometimes child themes can have drawbacks too – eg we save the theme settings with a prefix which contains the theme name. Now if you use a child theme you’ll also change the theme name and thus loose the settings. If you use a child theme from the very beginning that’s no problem at all but unfortunately many users start to build their websites, configure everything and then they find one or two things they want to change. In this case it’s much more efficient if they just add the code into the quick css field or into functions.php and if they want to update the theme they just need to take care of one or two modified files…

We’ll never modify custom.css – that’s for sure. I can’t promise you that we won’t modify functions.php however if you always add your code at the very end of the file the update shouldn’t be a problem. Just replace all files with the updated files except custom.css and functions.php. Then open up the “old” functions.php, take your custom code from the end of the file and add it to the update functions.php. Then override the “old” functions.php with the new version and that’s it.

Personally I’m always updating my websites this way and I don’t use a child theme too. Note that child theme updates (sometimes) require some work too – especially if you’re using function overrides you need to make sure that the theme function/class didn’t change. If we i.e. find a bug in a theme code we’ll update the code in the theme files. However your child theme function will always override the theme code with your custom code and if this code still contains the bug the updated theme code won’t be executed…