You can do it either way. Personally I find it's a bit easier to just boot from the install DVD, since it's going to do that anyway, so you can just skip a step or two that way. The rest is really up to you. You will be given the option to format the drive during the install process, so if your current install is "all messed up" I would strongly recommend doing that. Upgrading over a damaged OS usually results in an even bigger mess than you started with. Whether or not you disconnect all the other drives is up to you.