Ok you actually would have a couple of options on how to do this. During the installation, you would have a couple of options: Erase and Install - which wipes out the whole system and replaces it with Leopard, or Archive and Install which only replaces the system files, but preserving your applications, emails, address book entries, and everything else.
If you pick Erase and Install, you would be given the option of Migration Assistant's 'Transfer from another Mac'. You can use this option to transfer stuff from either: Another mac or a firewire HD which is bootable (Clone of your existing mac).
If you decide to go ahead with the 'Transfer from another Mac' option, you would be given a list of things which could be transferred over like: Applications, Preferences and Network settings, Emails, Address book entries and your iLife stuff. However within each choice you cannot specify what data to be transfered, e.g. All applications except Office 2004 and Adobe Photoshop CS3.
If you decide to skip this part, you would still be able to use Migration Assistant when the installation is done. However, the stuff transfered would be not to your own account but as a second account. E.g. If your master account is Jon, and Migration Assistant detected another Jon account on another Mac, it will transfer the whole account over, which means you would have Jon, and Jon1 on your mac. Hence this would not be ideal unless you intend to have multiple accounts on your mac.
As a brief summary to all your questions, I would recommend backing up manually the stuff you want to transfer over on a ext HD. You can do this by duplicating your music library over, your mail folder over, preferences folder (most important) etc, then manually drag them back in after the installation is complete.
Hope it helps!
