It is best to always do a format install. so That being said Start from scratch with the latest and best firmware. so you don't have to start all over again. Lately OTA updates have not been working so pretty much count on backing up your apps with titanuim backup or starting from scratch every time you upgrade.
I believe the reason why we have so many people with weird problems and corrupt installs is from trying to overwrite instead of starting from scratch. It may look like it is working fine at first but then weird things start happening.
I now always do a format install and have never had a weird issue pop up when i have done so.
You mean i flash up direct from 1.20 to 2.0 version??