Is a clean install better than upgrading?

Typically, upgrades are just fine in Ubuntu. It's not like Windows where you have a huge registry to carry over from your last system. As long as you haven't had to follow many tutorials or done any workarounds to fix problems in a unique way (i.e. using a special application to enable your wireless card or made some major changes to your kernel for whatever reason) you'll be fine.

In fact, I'd say about 90% of people who are asking this question will be fine with the upgrade.

If you want to stay absolutely safe, you can always wait for the vetted point release upgrade, or even maybe wait for the next LTS release in a few years. It's your choice. You'll still be supported for the next three years with updates if you're on 10.04 right now.

That depends what you use Ubuntu for.

• If your installation is only a toy or an appliance (e.g. just for web browsing) and you haven't customized it, reinstall. Make sure you save any personal data (typically you'll want to back up your home directory and restore selected parts).
• If the only customizations you've done on your installation are to install additional drivers or make other tweaks because your hardware was poorly supported under the old version, it may be better to do a clean reinstall.
• If you've customized your installation in any other way (configured system settings, installed more than a couple of additional programs, etc.), upgrade. If you've used Ubuntu actively, this case probably applies (if nothing else, you're likely to have installed a bunch of packages).

At the system level, Ubuntu is very good at smooth upgrades. Upgrades are tested before each release. This is a supported mode of operation, and it's more likely to leave you with the system you want than reinstalling and trying to remember all your customizations.

At the user level, Ubuntu's default interface is Gnome, which is not so good at importing settings from one version to another. Thus the choice is between

• starting from a fresh home directory and restoring all documents and selected settings from a backup; and
• keeping your home directory across the upgrade, and looking into the problem if something goes wrong.

In either case, you might as well do a system upgrade.

Generally a fresh install is preferred for the reason I have seen a lot of issues with the upgrading process. Upgrading process generally ends up going in some crappy graphic driver problem or a GPU one. I even got weird problems, like non availability of shared folders and data loss.

Well its all up to you, as problem also persists when you are going for a clean install. But clean install problems are generally easily understood and recoverable.
Well enjoy installing Ubuntu :)