Exchange 2007 use PowerShell 2.0 and the appropriate .NET version. if you upgrade PowerShell you will need to install a newer version of .NET. This can. and has been demonstrated to, cause problems with Exchange
The general advice is NOT to upgrade PowerShell on and Exchange system. This can be a pain because you miss out on a lot of functionality so the advice is to upgrade an administratrion system and connect to the Exchange box(es) remotely. PowerShell 3.0 and later are quite happy talking to the Exchange remoting end point. Its how I administer multiple Exchange organizations
Thanks for this, So just clarify, updating my management terminal server which has the exchange management tools installed (no roles), will work fine and not cause any problems as it is connecting remotely to the actual exchange server?