By software do you mean Lion itself? You can always upgrade on top of the same or previous version of OS X in place without reformatting your drive or loosing data. However, you should always have a backup, but of course you already knew this,... right? =) If your installer is Lion 10.7 and you have 10.7.2 installed, you won't be able to install over top of the existing version without reformatting.
If by software you mean individuals apps, you should be able to delete them and reinstalled them as often as you like without loosing your data associated with the app. That should be true for any version of Mac OS X. iOS on the other hand, when you delete an app, its associated data gets deleted from the device as well.