This is almost a religious argument. I have always restored and moved on with life and never had the first problem with any of my iPods, iPhones or iPads.
Others swear about starting from new. I just do nto have the time to screw with it so I do a restore.
Another vote for only setup as new if you are actually having problems. There's a very slight chance that setting up as new might give you a performance increase, but it's not worth the hassle of setting up everything again from scratch.
Yes, because Apple will blame it on you if you have some problem. So set it up as new and if you have problem, scream in their face that it is set as new.