Hmm... On my laptop I upgraded from 8.10 to 9.04 with the 4th option, i.e.
and everything went smoothly – except for the fact that I had to install all of the CrunchBang-specific packages as Debs from http://crunchbang.net/packages-9.04.xx/pool/main/ afterwards – after the upgrade, I had lost the Usplash theme, GDM theme, CrunchBang themes for Openbox, openbox-logout (I installed oblogout as a Deb package afterwards, too, and edited the menu) and what not. But now everything seems to be back to normal, so far so good, so I guess it was worth it – even though I'm feeling a bit nostalgic about the default #! look in 8.10.
In my case, having installed and configured many non-default applications and personalized my system quite a bit, a fresh install would have meant starting many things from scratch. So I think a fresh install is indeed "recommended" but mostly when you have a close-to-default configuration.
I never use smilies, but there are exceptions that prove the rule
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