I tried both, started with an update, and the phone was sluggish. Restoring my backup and applications caused a reboot cycle.
I then reflashed both eMMC and firmware, only restoring contacts and calander, and its like a dream! with 100mb rootfs free!
It's little bit of a pain reinstalling apps (But only a few I really ever used on a regular basis) so its nice to ditch the crap.
Looking foward if this really is the last big update from Nokia, then might as well go for a full reflash now make sure you start off on the right foot.
Its kinda lke upgrading from XP to Vista! You really wouldnt want to upgrade, always go for a fresh install