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Generally, a clean install should be done unless you have good reasons not to. Upgrades regularly fail, either because of third party software that is not compatible, or malicious software that breaks in the new install.

Backup your user data, format and install the new one. Especially if you are going from 98 to XP. You'll definitely want the NTFS file system, and you can't get that with an upgrade.

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Q: When is clean installation preferred to an upgrade?
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