There are three types of installs you can do:
1. Upgrade: Essentially, it just replaces the Panther system files with Tiger system files. All your programs, files, music, preferences, accounts, etc remain the same.
2. Archive and Install: Takes your "Home" folder, saves it, and then installs Tiger. You'll have to drag files you want to use out of the archived folder and put them in the new Tiger Home folder.
3. Clean Install: Formats your hard drive and installs Tiger. Like taking the computer out of the box. You'd have to reinstall any premium software and things you installed after you got your computer (Quicken, MS Office, iLife, except iTunes, etc).
http://www.apple.com/macosx/upgrade/
(If I explained any of that wrong, please correct me)