I just replaced an MPB2 on an XTS but used the same PMU, was told by the repair shop that the MPB2 had FP 4 software on it but my old MPB had FP 2. Do I need to do incremental upgrades or can I make the jump all the way up?

Yes, you do need to upgrade incrementally or you'll lose button programming with a standard download/upload. If your button appearances aren't too complex, I wouldn't sweat it. I'd just upload the database and then make the necessary changes afterward.

I think the MPB2 also needs to be rev 1.4 or greater to support the upgrade. I know the MPB1 requires it.

Nope, any MPB 2 will take the upgrade...it has more ram. If you are using PRI and did you will end up with a mess of little troubles...after you upload, incrementally or not, just warning you.