OS X Mountain Lion install?

I'm using an iMac 2.66 Core 2, 4gb ram with OS 10.5.8
When up grading to 10.7, does it do a clean install, i.e. clearing the harddrive, apps and files?
I'm thinking it is time to upgrade but I don't have time to do backups and re-install software.
Thanks!

The process of installing both Lion and Mountain Lion seems uselessly complicated as Apple does not sell them on optical disks (which is logical, optical era is behind), the default distribution is a download. Lion was also distributed as a USB flash drive install, but ML seems a download-only way.
I am not sure how legal issues are, but you may purchase ML as an application, then create your own boot flash drive. If you are not accustomed to this procedure, try to use Lion Disk Maker (a free app on macupdate.com), just that you need Mac OS X 10.6 or newer to run it. If you purchased the Lion or ML download and you have the rights to install it, I do not think you infringe any copyright. If find this solution a lot simpler than to go to 3 OSs in order to get to ML. It is time consuming, unpractical and ultimately unrecommended. A clean install via erase-and-install is always better than upgrade/

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