Yes, no need for the 'Sony' sync 1. You can upgrade to Sync 2 instead of 3 but the wiring is different and extra modules are required like the GPS module etc.
If you're going to go through the effort, Sync 2 is not great and it wouldn't be worth it in my opinion compared to Sync 3.
See this thread for a Sync 1 to Sync 2 guide.