Not exactly reformat, but I'll install it on a separate drive/partition and keep Tiger around (and bootable) until I'm satisfied with Leopard as my only OS. That's what I did with every previous upgrade -- Puma -> Jaguar, Jaguar -> Panther, and Panther -> Tiger. In the last case, it was particularly useful because Tiger had a USB bug where it would kernel panic every few days on my machine, so I stuck with Panther for a few months after buying Tiger. It turned out to be a USB mini-hub that I later ditched, though I still contend that the
software should have handled it more gracefully instead of crashing. I only recently blew away my Panther install to reclaim some space on that disk.
For most people, I strongly recommend the Archive & Install option. It's the best of both worlds -- little to no incompatibility problems, your old system is still there in case you need to copy something over, and you still get a clean system. I'd do this too, but I'm such a control freak that I prefer to do a clean install on a new disk/partition and manually copy over whatever I'm missing until I'm satisfied.
I'm sure Apple's done a nice job with it, but I still advise everyone to stay far away from the Upgrade option. There's simply no way for them to anticipate every little piece of third-party software you may have installed which made subtle changes to your existing system. Those changes, when carried forward into the new OS, could spell unexpected trouble. At the very best, you'll have a lot of extra unused crap laying around your new system taking up disk space. At the worst, that crap will interfere with the new system and cause problems. I don't think the Upgrade is worth that risk at all.