Of course, you'll have to uninstall DevForce 3.4.0.3 before you can install DevForce 3.5.4.1.
To answer your question, I would say that there is at least 99% chance that you will be able to run your 3.4.0.3 applications on DevForce 3.5.4.1. I do caution you that you may have to make a few changes to your solutions. In particular, make sure that all of your IdeaBlade references have a "Specific Version" property of False.
I say a 99%, not 100%, chance of success, because it is possible that there could be a breaking change between one version of DevForce and another. For DevForce 3.5.4.1, there are no breaking changes.