From what little I myself know, downloads.bak and downloads.dat are not to be tampered with: they contain the information of whatever happens in your incompletes folder: how much of a file is dlded and stuff. If you want to upgrade to, say, a newer OS with a clean install (I mean, format then install), then back up the incompletes folder (and whatever else you want backed up of course). When you reinstall LW, a new Incompletes folder is created with a new set of download.bak and download.dat files. Delete these and replace them with the ones you backed up (and, of course, add all the incomplete files you backed up in the new incompletes folder): LW should now know what files were dlding last time you used it (with the previous OS) and what other files were in your Icompletes folder.
Updating only LW keeps the old preferences, including the old Incompletes folder and shared folder so you don't have to do any of that if you only change the version of LW you are using.

As I said before, I am quite positive that the red files are not Incompletes (if you go to your incompletes folder in the finder, I'm pretty sure that you won't find them there) because one of the more experienced people in these forums told me so (I believed him), but unfortunately, I forgot what they were exactly and have no idea how to look for that particular post.

__________________
iMac G4 OSX 10.3.9
RAM 256MB
LW 4.10.5 Basic
ADSL anything from 3 to 8Mbps/around 1024kbps

"Raise your can of Beer on high
And seal your fate forever
Our best years have passed us by
The Golden Age Of Leather"
-Blue Öyster Cult-