We actually put this on our latest blog post:
"If you are upgrading from 1.6 be sure to read Joomla's tutorial here:
http://docs.joomla.org/Upgrade_1.6.5_to_1.7. The most important thing to know is that you must be running at least 1.6.5 to perform the upgrade. We have seen many posts of people saying they have successfully upgraded from 1.6.3 straight to 1.7.0. Although it may appear to work there are a few database changes that will not take effect if you're upgrading from a version lower than 1.6.5. If you are not on 1.6.5 or 1.6.6 just use the following patch to upgrade
http://joomlacode.org/gf/download/frsrelease/15378/66849/Joomla_1.6.0_to_1.6.6-Stable-Patch_Package.zip and then you can successfully upgrade to 1.7."
So even if you are on 1.6.3 you can still use the 1.6.0 patch to upgrade to 1.6.6