Windows 7 Release Candidate Clean Install Does NOT Involve Reformatting
I'm a bit behind in listening to the Windows Weekly podcast by Paul Thurrott and Leo LaPorte. So, I just listened to WW #104 a few hours ago. During the course of the podcast, Paul and Leo discuss Windows 7 Release Candidate and commented that the best way to install the RC is a clean install because it does not support upgrading from XP or 7 Beta (all true).
However, they then mention that a clean install involves reformatting the drive. This is not true for the RC or the previous 7 Beta release. Here's what happens.

If you are performing a clean install for the first time on an existing Windows XP installation, the XP folder is moved to Windows.old. If you, like me, are performing a clean install on a PC that had XP on it first and currently has 7 Beta, the old XP files remain in the folder Windows.old while the 7 Beta files are placed in Windows.old.000.

However, the former version of Windows is not the only thing placed in those .old folders. You can see that the Program Files, Perflogs and Users folders along with autoexec.bat and config.sys files are also placed there. The new Windows 7 RC files completely replace those folders and the files in them to create a clean install. So, you won't see your old software or configuration. But, they are all there in the old folders until you delete them.
I actually looked for an option to either low-level format the partition or simply format the existing NFTS partition but did not see it during the Windows 7 RC installation process.
May 19th, 2009 - 20:51
I was a bit annoyed to discover that there was no reformat option during the Windows 7 RC install process… But then I found it. On the screen where it asks you to choose a partition, you have to click the “drive options” link to see the format option.
May 20th, 2009 - 21:48
Darren: Thanks for posting your comment. I happened to pressing drive options and noticing Formatting as an option too while installing Win7RC on a second PC this past weekend. Good catch!
December 16th, 2009 - 21:35
The “drive options” link no longer exists – I had vista and I updated to Windows 7 Ultimate but I still have the old OS clogging up my HD- I really want to know how to get rid of it
January 5th, 2010 - 09:40
Thanks for your comment. Good Catch to find the formatting option when reinstalling windows 7 again.