Well, I would say there is no single best answer to your question. If you look for general answer then yes in-place approach might be better.

However it really depends on your situation. In case you are running your SharePoint on Windows 2003 32bit upgrading in-place on that platform is not recommended (you would have to upgrade Windows and everything else first). Even if you are running on Windows 2008 64bit now, you still need to check the HW reqs to see if you have good hardware for the new version.

Well, I would say there is no single best answer to your question. If you look for general answer then yes in-place approach might be better.

However it really depends on your situation. In case you are running your SharePoint on Windows 2003 32bit upgrading in-place on that platform is not recommended (you would have to upgrade Windows and everything else first). Even if you are running on Windows 2008 64bit now, you still need to check the HW reqs to see if you have good hardware for new version.