Become root and follow these steps:

  1. As root, Run:

    cd /usr
    mv portage portage.old
    git clone https://github.com/funtoo/ports-2012 portage
    
  2. Make these changes to /etc/portage/make.conf:

    SYNC="https://github.com/funtoo/ports-2012"
    # These were suddenly needed when migrating to Funtoo.
    # You can pick any version of python that's available in the portage tree.
    # Once portage is upgraded, /etc/portage/make.profile/parent should take care of these.
    USE="$USE python_abis_2.7 python_abis_3.3"
    PYTHON_ABIS="2.7 3.3"
    
  3. Upgrade portage:

    emerge -1 portage
    
  4. Edit selected profiles in /etc/portage/make.profile/parent . This is normally done using eselect profile, but that's not possible at this stage of the process.

    gentoo:funtoo/1.0/linux-gnu/arch/x86-64bit
    gentoo:funtoo/1.0/linux-gnu/build/stable
    gentoo:funtoo/1.0/linux-gnu/flavor/core
    
  5. Upgrade everything else. This will likely intially fail, unless the installed packages haven't been upgraded in some time.

    emerge -auND --autounmask-write @world
    
  6. If the above fails because of conflicts, look at them and asses whether they're unlikely to cause problems, since they're very close (version-wise) or non-essential. If so, just add --nodeps to the above command and rerun.

  7. If that also fails, re-edit /etc/portage/make.profile/parent and try using "current" or "experimental" instead of "stable", then retry the subsequent steps.

Here be Dragons

The preceding is a simplistic rendition of the process I actually underwent. If you want to attempt it, be prepared for the horror of the dependency-hell you're about to enter. If you manage to endure the experience, I can assure you that by the end, you'll have a much better understanding of emerge/portage.