A full retail eddition will allow you to move it to a new computer if you upgrade to new model or wish to replace the m/board and make hardware changes as needed, without needing a previous version when reinstalling, be it on the same or different HDD.
While major changes may require a call to MS to activate, if done within a short time of instalation, (I think it's about 6 months) you will be asked how many computers it's installed on, so long as it's only on one you will be ok.
In the long run you would be better off with the full version, but if money is short the upgrade works much the same as the full eddition, but you will need to hang onto your OEM disk and product code for verification.
Clean installs are always preferable... upgrade installs (at least when it comes to Windows) usually prove to be unstable or prone to other issues. A clean install guarantees that you get the most out of your installation.
You should be able to do an upgrade if you want, but I agree with Zoron that a clean install is preferable if possible. If it were me I'd go as far as buying a new hard drive to do a clean install on if I didn't have any other alternative.
I realise that a clean install is preferable, but at this point in time I really do just want to perform an upgrade. If this is possible using the full edition then I will get that as it is the same price as the upgrade edition in the UK anyway at the moment.