Arch installation from FaunOS
 

I have a usb with FaunOS installed. This distro is based on Arch linux and has many pre-installed programs. However FaunOS was released around 2008 and has since been discontinued. Would it be a good idea to install Arch linux from this distro and then upgrade to bring the system uptodate? I will have the benefit of many preinstalled programs.

Why not just give it a try?

I was being a little careful because I have in the past lost partitions and data with adventures like this.

You can't lose data if you make your regular backups, and of course it is recommended to make backups before doing any system critical task, like installing an OS.
Anyways, may be you can try it first in a VM like Virtualbox, this way your system will be safe.