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A clean install refers to the installation of a software package where the previous version is completely deleted. The alternative to a clean install is an upgrade, where portions of the original software remain and are not removed.
Doing a clean install of an operating system (OS) implies formatting the hard drive. This means that all partition data will be lost and all data must be backed up to an external device. The process is to then to do the install, reinstall all applications and copy back all data.
Because this process can be time consuming, it is a subjective judgment call whether the extra time is worth it. In theory, there should not be a problem with upgrades. In practice, clean installs may be the only way to get an install to work.