You only need to backup your work, docs, photos, music etc, but include any config files which
you may have modified, e.g. modified grub2 scripts etc.
I would take the advice of your wiz and do a clean install, in my experience it takes about 3 times
longer to do an upgarde and its much more problematic, as each file will have to be checked against
One advantage to a fresh upgrade is that all log files (which can grow quite large) will be created again
and you'll have more disk space. If you do a fresh install, no need to wipe partitions beforehand, just
let the installer wipe the partitions for you.
Its always prudent to make a backup, there are plenty of CD/DVD writing programs to choose from on
linux so I would create backups first before you do anything.