i voted 2 and 3. its always safer to start fresh. plus it feels like even more of a new phone if you do. its easy to re-arrange apps for like 2 minutes. any youd have to sync music anyways.
It's fun to start Angry Birds from the beginning again
Since it was a new phone I selected to format as a new phone. Sort of spring cleaning and went through every app and song before I opted to sync..