Yes, thats correct.
On installation, when asked to back up my files I said no, because I had already done that.
Then setup tells me it's going to create a windows.old folder.
It contains:
Program Files, Users, and old your old Windows directories
Total size is 17GB with 62,800 files and 11,850 folders.
All I can say is look through the contents of all the directories and see if there is anything important you want to keep.. Your Program Files directory is useless as all programs need to be re-installed to created the registry entries. Basically all you can look for is documents, pictures, music, etc that you may have forgot about.
I checked the registry to make sure there were no references to it and deleted the windows.old directory
All programs will need to be re-installed because the pointers in the registry are gone.
If it's a standalone application that doesn't include an installation, these programs will run correctly as after it's executed, the program itself makes entries in the registry