Yes, you have to off-load your data to another drive of some kind, as it's a "fresh install" process, which will delete all existing data on the drive containing the OS.
Microsoft needs to get a Time Machine like backup program for Windows. I did a fresh install of 10.6 on a new hard drive, and after it was over it asked me to plug-in my Time Machine hard drive. I picked a date to restore from, said I want data and user profiles, but not programs (figured I’d start clean on that front since I’d done a lot of experimenting), and waited. Everything was back perfectly, including everybody’s logins and their data.