I have performed an Erase and Install on a friends 24" iMac and it works great, he had corrupted some files by playing in the Terminal and I didn't feel like manually editing each of them back to defaults, so I just wiped it. He had everything backed up anyway.
Haven't had to do this on my MacBook Pro, works great, I went from 10.5 (which was only for 3 hours, when I first got the computer up and running), and then 10.5.1, and now 10.5.2. Great experience there. 🙂