With regard to roll-back-ability I have pressed a more recent version of the Joomla project right into a sub-directory (sandbox) from the existing site.

(We moved them from 1. to at least one.5)

To spread out in the recently submitted version for public access, I believed I'd just add an .htaccess file towards the existing documents root, to bypass the files therein:

+- /www
    +- index.php     # old version
    +- ...           # files
    |
    +- .htaccess     # htaccess file for redirects
    |
    +- /sandbox
        +- index.php # new version
        +- ...       # files

My .htaccess file is the following:

# .htaccess for sandbox redirect

RewriteEngine On
Options +FollowSymlinks

RewriteBase /
RewriteCond %{HTTP_HOST} mysite.com
RewriteCond %{REQUEST_URI} !sandbox/
RewriteRule ^(.*)$ sandbox/$1 [L]

It "works", and http://mysite.com now shows the items in the sandbox directory however links inside the latest version from the site include sandbox within their Web addresses, which still work obviously, but we now have http://mysite.com/sandbox/foo/bar happenening, whenever we only want http://mysite.com/foo/bar

Any ideas?

Why don't you slowly move the old site to /oldsite and slowly move the new site towards the root? If you have examined it and also the site works, there's you don't need to fool around with the redirecting.

Attempt to set property $live_site in configuration.php inside your joomla directory to "http://mysite.com"