If you play up, you are more likely to get bumped.
Far more likely. And you don't have to win playing up to be bumped up... that's not how the algorithm works. It all depends on whom you play and the scores, but generally speaking:
- if a 3.5 plays a 4.0 and loses 6-3 6-2, the DNTRP of the 3.5 player will rise and DNTRP of the 4.0 player will decrease;
- as a 3.5C you have a better chance of being bumped up if you play up and loose all your matches (but somewhat competitively) vs playing at level and winning 80% of your matches (unless the majority of the wins were blow-outs).
Keep in mind that year-end rating dynamics vary year-to-year (and, I suspect, region-to-region) as USTA continues to "re-balance" the numbers of players at a given level. Here are the stats for my area (Denver metro) for 2010 end-of-year:
2.5 total - 35 / moved up - 21 (60.0%)
3.0 total - 354 / moved up - 47 (13.3%; 3 players moved from 3.0 to 4.0)
3.5 total - 1085 / moved up - 56 (5.2%; 1 player moved from 3.5 to 4.5)
4.0 total - 1167 / moved up - 75 (6.4%)
4.5 total - 456 / moved up - 13 (2.9%; 1 player moved from 4.5 to 5.5)
5.0 total - 116 / moved up - 6 (5.2%)