db.properties is just used to provide connection details for ePO to reach the Sql server. You won't lose anything in ePO by changing it - It will either allow connection...or not.
The information about policies etc are all in the db itself.
The one thing you won't be able to work out is the hashed password value in db.properties however. Hopefully that part remains good.
And no, the password hash can't be reverse-engineered. One-way only.
Most commonly the port or password is wrong.
If, however, you are trying to have two ePO servers talk to the same ePO DB that is flat-out not going to work.
I've gone to test the connection in the ..core/config area of ePO and the 'sa' account connects ok, checked that the port is correct too.
Know why else I may be getting the .dp properties error when trying to upgrade patches?
If Iwanted to rebuild the db.properties file could I just rename the current to something else?
If your ePO server is working and you can logon to the the console then their is likely nothing wrong with the db.properties file itself. Please post the entire log you got the "Setup detected an error reading the db.properties file required to continue installation.verify that this file is in the correct location" error from as it may provide more data to help pinpoint the failure.
We had this exact same issue with the same patch. For us, the solution was to make sure that the account specified in the Core/Config was using SQL authentication rather than Windows authentication.
Using the 'sa' account to connect to the DB, have that set as the owner and SQL authentication instead of windows.
Know where I can find the log from that error? Not in C:\ windows or system32 or temp. Windows 2003 server.