Last time I did it, you pay the difference. (e.g. 25 -> 50 users, you'll pay for another 25, not re-buy a whole 50)
Contact Atlassian sales - they'll be happy to explain in detail, and talk about making the licences co-terminate on the same dates etc
There is a credit for upgrading a license tier, so you won't pay the full amount for the upgrade as you would for the download license but you can figure out how much it would cost you to upgrade from your current license tier to the license tier you wish to upgrade to from this page: http://www.atlassian.com/licensing/confluence#downloadlicenses-2
All the best,
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