Archive and Install installations require the largest amount of available disk space because you need to have room to preserve your existing System and the new one you are installing. This is a good choice if you've already backed up your important files and are trying to resolve an existing issue. Mac OS X-installed applications, such as Address Book and Safari, are archived, and new versions are installed in the Applications folder. For a list of which files are archived, see
this article.
Some applications, plug-ins, and other software may have to be reinstalled after an Archive and Install. Fonts that were installed in the Fonts folder in the top-level Library folder can be installed in your new system by copying them from the Previous System folder.