Import a very old WordPress Version into new WordPress

Here is my problem: I have been blogging for about six years now at Blogsome.com. I’ve had no problems with it whatsoever, until a few days ago, when they suddenly announced that they were going to close down on a very short notice. So at the moment I’m looking for a new blog.

At the moment I’m thinking of going for a cheap hosted server. My problem is that I want to import all my old posts in the latest version of WordPress. This is problematic because:

• The SQL dump I got out of their backup page is really big (about
  30MB). Will this safely import into a new WordPress site?
• Blogsome never updated their WordPress version, so it has been stuck
  at WordPress Version 1.5.1 for more than half a decade now. How can
  this SQL dump be safely imported into a new version of WordPress?
  It’s unfortunately the only way I managed to export my blog’s
  database. Blogsome does offer a WRX-file backup option, but that one
  unfortunately is broken.

So what would be the smartest way to handle this?

I would use a step by step strategy.
1) Make a local installation of WP using XAAMP or similarl
2) Get 1.5.1 version from wp repository
3) Import all and check all is fine
4) Do a backup of imported data
5) Get a more recent version like 2.0 or so
6) Update and check all is ok and do a backup
7) Repeat step 5 and 6 with 2.5 then 3.0 and then latest WP version

Probably moving from 1.5.1 to 3.2.1 directly will work flawlessy, but a 2 3 step upgrade would be better so any upgrade habve to update less data in the DB and there is no risk to timeout half the way. Doing it locally help you configuring large memory footprint for WP (256MB or so), long timeout time for PHP 15 mins or so.. assuring you can update large amount of datea at every step. DOing locally it’s easy and you can make backupd and update faster than online. ANd you will end with a backup of last versione of WP you can upload to your new host