Well the choices are Upgrade, and Custom install, but it says
"This option does not keep your files, settings, and programs. The option to make changes to disks and partitions is available when you start your computer using the installation disc."
(I'm assuming it means the setup on DVD/Flash) but it also says
"If there is an existing copy of Windows on the partition you selected and you don't format or delete the partition, user files are saved to the Windows.old folder on the partition. After the installation completes, you can browse to that folder."
Now what is the "partition" ?