It seems that kde devs made lots of changes in the new KDE version. The most significant is that they moved files from kdebase to kdelibs - among others - and since pacman checks for file conflicts between pkgs, it stops with messages about these conflicts.
In order to upgrade KDE 3.1.5 to 3.2.0 you have 2 options :
Remove 3.1.5 completely (only the kde pkgs, not their dependencies) & install 3.2.0 fresh. This is what I' ve done when building 3.2.0 pkgs, in order to avoid linking problems, that's why this report didn't come out earlier.
Force install it (pacman -Sf).
Another thing that might cause inconvenience is that kmail is now part of kontact, included in the kdepim pkg.
I'm sorry for any troubles this upgrade caused, but it's not really my (or AL's) fault anyway :D.