RH upgrade 7.1 to 8.0

I want to bring my servers up to 8.1 or 9.0 this summer.  My problems are to
little disk space and I have over 5000 accounts.  My solution is hey presto,
buy a new server which led to the problem of passwords for all those users.

Problem 1: Can I just move the password, shadow, group files and relevant
home dir structure and expect the log ons to work?  It sounds too simple.  I
thought there was some sort of a salt file for the hash in the shadow file
that I may need.

Thanks
Chris 
Curry College 
Technology Center