I have run RPM systems including Fedora for many years and have never used the install disk to upgrade. I have always used RPM (via Yum, up2date, URPMI, Red Carpet, SMART, or others). It has always gone well.
Well, I have run into package incompatibilities here and there. I would say that knowing how to 'temporarily' break the RPM database has probably been required a couple times along the way. For example, you might have to force the installation or removal of a package that is blocking other change. Or, a newer package might want to overwrite a file that still falls under the dominion of an older package.
My memory of when these have been required is a bit cloudy as I have also done dumb stuff like go from Fedora to RHEL or vice versa. I even went from Mandrake to Fedora once.
Other than a few Scientific Linux and CentOS machines I am mostly off RPM based systems these days though. Having to source from multiple (inevitably incompatible) RPM repositories has always caused more trouble for me than moving from version to version of the OS. I have found it necessary far less often to source foreign packages (or install unmanaged applications) when using Ubuntu or Debian.
I have run into similar issues converting an Ubuntu machine to Debian or back as well. The machine I am typing on was originally an Ubuntu machine, was migrated to Linux Mint, and is now Debian Unstable. The whole migration was nothing more than overwriting sources.list and using 'apt-get' each time.