It is not clear to me how much free disk space I need to perform an
INPLACE upgrade of OES2SP1/SLES10SP2 to OES2SP2/SLES10SP3
I have 3.2GB available on /
Is that enough?

I do understand a NEW server requires this:
Free Disk Space
Minimum Requirements
7 GB of available, unpartitioned disk space
Recommended Requirements
10 GB of available, unpartitioned disk space. Additional disk space
might be required, depending on which OES components are selected and
how they are used.

srvdrum2:/ # df -h
Filesystem Size Used Avail Use% Mounted on
/dev/mapper/system-sys_linux
9.9G 6.2G 3.2G 67% /
udev 7.9G 528K 7.9G 1% /dev
admin 4.0M 0 4.0M 0% /_admin
D