It is my understanding, and others may correct me if I am wrong. If you chose custom, and do not go into advanced options and format yourself, your files are saved to a file windows.old (which you can acess after installation). Your drive is then formatted and then the new OS, is then installed. There has been discussions, in this forum, concerning the benefit of formating yourself, (using the advanced option, included on the upgrade disc). Some feel that everything may not be removed, unless your format yourself during the installation process. Everyone, agrees, however that clean or custom, is much better than an upgrade.
In this forum some use the terms clean and custom as one in the same. Others say that clean means that you format yourself.
You may note from the time on the above postings, they came in as I was typing my response, please excuse any duplicate information