The Up-to-Date DVD is just a dropped in disk in nothing but a sleeve.
You CAN do all three options, clean install, Archive and Install and Update.
However, the catch is you MUST have a previous version of Mac OS X installed on the drive before you can do any of them. So if you say, erase the drive with disk utility it won't let you install until you put Tiger on it, but then you can do a clean install (erases drive) and install a fresh copy of Leopard.