If it's a system you don't mind trashing then trash it. Or look at VServers ;-)
You can always just backup all the configuration files that you need before you upgrade. It "shouldn't" trash your configs so long as nothing major changes in FC5, but then you can never be too sure. Upgrading can be dodgy, but RPM overwrites tend to leave existing configuration files if they are deemed to be "custom".
As you say, imaging is probably your best option if it all goes pear shaped...