If you already have the FC2 CD's and you are going to wipe out your partition(s) anyway...why not just use the CD's and try an upgrade? What do you have to lose? That's the attitude that I took and everything went just fine. There are a few major package upgrades (XFree-->xorg and kernel 2.6) but most of the changes are no worse than updating rpms much like one does with yum, apt or up2date. I had to edit xorg.conf and make one change (Option "XkbRules" "xfree86", changed xfree86 to xorg). This post may help you
Upgrading FC1 to FC2 . I also recomplied a 2.6.6 kernel using the config file from the new FC2 kernel and reinstalled my nvidia drivers. After that, I updated a few non-Fedora packages from freshrpms using synaptic and I was done. Whole upgrade took less than 2hrs including compiling the huge kernel.
Yeah, most people say that a fresh install is always better but how many of them actually tried an upgrade first? Looking at this forum, it seems that many people are having problems with fresh install too. I would suggest you try the upgrade with the CD's and if that fails, do the fresh install. Don't use yum apt or up2date to do the upgrade because that does not appear to work well.