Actually the Jaguar installer gives you a bunch of choices on how to install 10.2 (if memory serves, it's upgrade, full install (reformats your HD), or archive-install). Some choose the the "upgrade" method, but others have complained that their system doesn't run as fast as those who choose the full install method.
Luckily, Apple gives you an option that lets you archive your current setup, and then adds it to the full-version install. Have a look at the Apple KnowledgeBase for more info on this...I seem to recall reading a step-by-step post on this very subject.
The archive approach was the one that I opted for and it worked fine.