The release notes for fc12 promote preupgrade as a recommended method of upgrading your system and as being intended to be hassle free - barring a couple of common bugs.
My experience with it is that it was a complete hassle and waste of time and downloads. First I ran it for a while, and as the screen said I could, stopped the process on the basis I could resume it later. In fact, I couldn't. This is the subject of a major bug that is still being worked on. I then had to start the whole process again. I then ran into the bug about the small boot space - which I have made some comments on.
I was then able to run the install. However, X failed to boot, leaving me with a black screen. This was resolved by removing my propriety video drivers (fortunately I still had my old fc10 media to set up a rescue system - having given away my fc11 disk to a new user). But the installation was fundamentally broken - with no access to the Internet or CD drive. So I decided to cut my losses and download the install media. Fortunately I managed to do that all within my monthly internet allowance (just).
Reading through more in this forum on preupgrade suggests it has some major problems. It also has an inherent danger of leaving users anyway of booting their system into rescue mode (unless they have media from a previous install available).
My recommendations are:
1. preupgrade should be withdrawn from the production repos and only be available in testing - until further development
2. release notes should be amended to say it is an experimental process and only recommended to advanced users
3. the design of preupgrade should be reviewed - my suggestion would be to redesign it to produce a custom-spin (DVD ISO) based on the currently installed packages, which also preserves the configuration files, and can be used for either an upgrade or fresh install.
Couple of notes:
I am putting this here because couldn't find anywhere else to raise it - let me know if there is a better place
I have switched to Ubuntu as a result of this experience - as I wasn't sure how much of the problem was with fc12 itself and also I didn't have enough allowance left to download the fc12 DVD. I don't want to make big of issue of this - only to point out that it was sufficiently serious to make me change to another distro.