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just a down time of 2 hours....
take backup of database before upgrade.
create seperate home for 10.2.0.5 so that you can switch back to previous home.
prepare proper plan for upgrade and rolling back (in case of error).
There is no requirement to create a separate/new 10.2.0.5 HOME. As for the impact on the IBM software, you should be asking IBM
Before 11gr2, the upgrades (for minor releases) were done with patchsets applied in the base OH.
Other methods (like installing a patchset for .5 on a new directory) wouldn't work.
So, I would suggest, creating a test environment, and doing the upgrade
Ask IBM :)