Doing an inplace from 4.1.2.20. Im reading through the documentation and I know, Im going to back up the registry, database and CAL info and also take a VM snapshot of it before I start the process.

But with in-place, does it retain all the user accounts. The upgrade guide talks about migrating the user but I dont see how that pertains to an inplace upgrade.

Any advice would be helpful. Thanks.

Yep yep. All user accounts on the database are kept in place as well. Proceed with your backups first, then your upgrade. If all goes well, you won't need your backups. Good luck!