First, you should be on 1.2.3, not 1.2.2. (Or even 2.0 at this point)
Package installs do not require a reboot. For bandwidthd, all you need to do is go to Services > BandwidthD and set whatever settings you want, save, and then wait a bit for it to make the graphs.
You can make a backup before you install if you want, no need to backup the whole HD. Just go to Diagnostics > Backup/Restore and download a backup. If something goes wrong, you can reinstall (From CD, embedded image, etc) and then just restore your config file and it will go back to the way it was.