You don't need to delete anything, but you can skip a few large folders, ClientScript and Data, but you should upload the rest. I would upload the Setup folder first then the rest except for Data and ClientScript. You can also keep your Web.config file it hasn't changed. You should delete DotNetOpenId.dll from the bin folder of the download package so you don't upload it since it has to be deleted for medium trust.
After you finish uploading, download your Web.config and upload it again, this is just to recycle the application by changing the timestamp on the file.
Hope it helps,