My theory is that upgrades work better when your Ubuntu is as close to "normal" as possible. If you don't feel like you're very proficient with Ubuntu, your Ubuntu is probably very close to default, and an in-place upgrade will work just fine.
If you've really hacked around with it under-the-hood then you might run into problems.
What's the worst that can happen? Your data will still be accessible, you'll just need to reinstall Ubuntu. That takes twenty minutes.
I think it'll all work out fine for you, but even if the upgrade is a failure you can still just do a fresh install of Ubuntu 12.04. Make sure you have a 12.04 CD already, just in case.
Just another note, too: Ubuntu 12.04 is two years newer than 10.04 and there are a lot of major changes. These shouldn't cause problems with the upgrade, but you'll need some time to familiarise yourself with the differences. For a start, the graphical user interface is almost totally different. Much more modern. I like it, not everyone does, but if you stick with it for a week or so you'll probably not want to go back to 10.04.
Last edited by 3rdalbum; November 17th, 2012 at 08:22 AM.
I try to treat the cause, not the symptom. I avoid the terminal in instructions, unless it's easier or necessary. My instructions will work within the Ubuntu system, instead of breaking or subverting it. Those are the three guarantees to the helpee.