@ Beepster - was curious about all of the same things so I used acronis true image to backup my system drive and tried both methods - unistalling first and also simply running the previous installer over the top of a current installation. Both worked just fine. I have custom settings with my samples, project and track templates, etc on a separate drive, as well as all of my vst instruments data, and none of these settings were lost by either method. The only difference was that if just running a previous iinstaller over a new instalation you may get the occasional 'overwrite newer file version with older file' confirmation message, depending on your system settings.
I too much prefer to do the updates myself and keep a copy of all previous installation files. It's great to know you can go back to any version at any time without concern. It makes sense that it is that simple - there is nothing magical going on in CCC. It's just an automatic installer of exactly the same files.