Upgrading durring production?Did I miss a chapter?

[SilverRat]

OK, I'm a new player--have skimmed the FAQ's 4-5 times and read them through 2 times, searched this site (maybe I'm searching the wrong words...) but when I was reading the suggested SE4 Dubious Strategy guide my eye caught on this 'post':

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evan42
Private First Class
posted 31 December 2000 11:32
The very first thing I build will always be a bare-bone ship yard base. It's take 2 turns to complete.
Then I will build 1 colonizer on HW [Ed: = Home World], and it takes 2 turns. And on the space yard, 1 scout ARMED with missiles. That will take 4 turns. Sure, It'll have shorter range, but I can use it to get rid of some AI [Ed: = Artifical Intelligence = computer opponents] start-up colonies. (Not as useful if played in a large map with fewer AIs.)
Also, before the completion of the scout, I would concentrate research in missiles and ship hulls. Since the scout can be "upgraded" during the production, so I will try to put at least 2 L2 missiles on a frigate, maybe L3 depends on the game setting.
Then 2 turns later, the colony ship built on HW will go colonize any colonizable planets in the home system. (If none, I would use it as a scout.) And the HW will then build a transport. The scout will take another 2 turns to be built on the space yard. The idea for the transport is to move some population off the HW ASAP [Ed: = As Soon As Possible], so more can be grown. Ideally, if another breathable planet is found in the home system, I will move 1000M pop to the new planet, that will give the new planet a 20% production bonus.
Anyway, 2 turns later, both the armed scout and transport will be built. The scout will go do some "scouting". And the transport will go do some "transporting".
Then if there are more than one colonizable planets found in the home system, I would build more colony ships, but usually I would use the HW to build another scout (2 turns) to head for the other warp point. And the space yard will repeat building colony ships.
Depends on the number of warp points present in the home and nearby systems, a third scout might be built. Otherwise, I will repeat build colony ships also on the HW.
When running out of planets to colonize or bumping into hostile aliens, I would start building a couple larger armed ships. But, since the scouts themselves are armed, they might be enough early on.
Because of the shorter range for the armed scouts, they can only explore 2-3 systems before turning back. So when colonizing other systems, the 1st structure to be built will always be a resupply depot. I don't consider having a shorter range as a serious disadvantage, because you normally don't want to colonize planets too far away from you anyway. Those armed scouts will also
ensure you have more empty systems to colonize later by taking out AI's start-ups.
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I have highlighted the part I would like clarified. Am I reading this incorrectly or can ship designs be changed mid-construction? Since he put 'upgraded' in quotes I think there may be some kind of way to do it, but I don't know it--does anyone else? This post is ancient (2000 I think) so it may relate to a diffrent version, but if it is possible I don't want to 'not know' how to.
IF it IS possible (/hopes so!) it should be in the FAQ-but doesn't seem to be (so I doubt it was missed).

All imput will be welcomed--thanks in advance!

PS - what do you think of my avatar? 8) made you look close didn't I?? lol.

Edit SilverRat- spacing in title removed 'T' in chapter.