I have a very slow internet connection (downloading speed is always between 40-50kbps) and it may cut any second.so if i start my upgrade and the internet connection disconnects is there any problem like system error.etc..or will it restore to its old state(11.10).
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I would not try to upgrade over internet if it is likely to drop, this would be likely to leave you with problems.
A better option would be to download and burn the iso and use that to upgrade from.
More information can be found here - How do I upgrade to a newer version of Ubuntu?

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It is no problem, as all packages are downloaded before being installed. This ensures that you have all necessary dependencies before installation begins.
If your internet connection is interrupted, you will need to restart the update command (if updating using apt-get in the terminal) and it will try fetching the file you were fetching when connection is interrupted. All the files that were already fetched are saved in /var/cache/apt/archives

Janus Troelsen
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That was my experience when I upgraded from 11.04 to 11.10. The net dropped several times but no damage was done. The upgrade was successful. The main thing to guard against is power failure. – Apr 28 '12 at 17:16