A slight clarification to the previous replies. The upgrade process is twofold: armor and weapons. In the case of weapons, the previous information given is correct. In the case of armor (which is what you are asking about), the previous responses are partially correct and not really spelled out in the FAQ. If you have an armor piece with a light level of 30 (pre-dlc), you can upgrade it to 36 and it will take on the stat roll displayed. If your armor piece is already light 36, you can still utilize the upgrade. However, all that will change is the stat (Int/Dis/Str). This is beneficial if you have an armor piece with a low stat roll and Xur is offering a higher roll. In both cases for armor, the upgrade tree is reset and will require you to re-level it.

I'd like you to share your story here in a feedback thread I created about these upgrades.

Upgrading an exotic via Xur is used to upgrade pre dlc exotics which had a maximum attack rating of 300 or light rating of 30 to the tier 2 Version which can be maxed out at 331 Attack rating or 36 light. Upgrading an Exotic via Xur clears it's upgrade tree progress. It won't affect stats, it will also not max out the upgrade tree. If you had a post DLC exotic, you may have wasted your shard and glimmer. [url=https://www.bungie.net/en/Help/Article/12457][b]Exotic Upgrade FAQ[/b][/url]

Upgrades from xur don't upgrade the weapons perks, they up their stats from gen 1 (pre The Dark Below) to gen 2 for more info look here: https://www.bungie.net/en/Forum/Post/105116330/0/0