I received the same warning and was upgraded without issues. Make sure to have a recent back-up before upgrading your BIOS. Also, have a new password ready when you enable TPM and don't forget to keep a record of the new password. (See below info from Michel)
TPM = Trusted Platform Module
At the highest level, it's a cryptographic chip that does not depend on anything else. In our case, it serves two purposes:
1. We can have it check the OS being run and make sure the OS (our version of FreeBSD) is signed/verified by UD
2. A root key is stored on the chip itself. The root key creates and manages a master application key that is used to create as many application keys as necessary for encrypting things (including the whole file system if need be). The only way the root key can be decrypted is via the chip. The only way the application keys can be decrypted are via the root key. So, all keys are themselves stored encrypted so the likelihood that someone can get access to the root key and application keys are exponentially reduced
So, when you enable TPM, the following takes place in the RAM (so no residue on the disk):
1. A root key is created and stored in the TPM
2. A master application key is encrypted by the root key and stored in the TPM
3. Both of the above are zipped up in a package and encrypted by your password and a very secure encryption algorithm. This file is stored in the conf directory of your IoP. So, BACK IT UP NOW
If you ever have to restore your IoP to another device, you WILL NEEED YOUR PASSWORD to decrypt #3 and recreate the keys in the new chipset. If you lose your password, you will have to start from scratch.