Re: Upgrading to latest version of Fedora
Backup is always a good idea, just in case something goes bad.
You can always try the "preupgrade" path, but the amount of disk space needed for /boot depends on how many packages you have installed. This appears to be because the preupgrade fills it with packages to be applied after the first boot. When the first boot completes these packages will be installed and the space released (well, mostly).
This is one of the reasons a fresh install is recommended. Another issue is that Fedora 16 uses grub2, and that can play hell with your partitioning - it needs a partition of it's own, so you loose one of the primary partitions. It is possible to workaround this, but it means using grub to boot grub2... which is a pain.
In my experience it is always a good idea to have the /home partition on a separate drive (in my case, it is in a SAS/SATA hotswap container, so I can pull it out during system install to guarantee no damage to it).
My next round of upgrades of my system disk will reorganize it - two primary partitions (grub 2 eventually), and /boot. The third will be an extended partition with everything else I need (two root filesystems, and a good sized swap). I use the two root filesystems to have a current system, and an upgraded/test system. /boot (and swap) are used with both root systems.