Boot from the disk and tell it to upgrade your 11.10 installation, saving your /home folder and so on. I did exactly this on two workstations and found it works quite well ..
I roasted my Xubuntu desktop today doing this. Wiped my Windows partition as well. I'm not sure why it hung, I left work before I could test things and research.
I just boot from disk so I can get the upgrade done as quickly as possible. This way, my machine does everything it needs to upgrade, without anything else going on. Then when its done, I let it update in the background while I make sure everything went smoothly.
In this case, it went very smoothly for me, and was worth the hassle. I upgraded from Ubuntu 11.04, which had been rather a bit of a mess actually, in the Unity/Gnome3/fvwm shell department, as in I had them all and had to switch around to get certain things I liked. Unity crashed too often (in 11.04) for me to trust it.
That has all changed. I am now running Ubuntu studio, which features fvwm, and nothing else. Gnome only if I truly need it, and Unity .. after the dust settles.
So I'm quite comfortable in my upgrade to 12.04, and everything works like it should - full multi-channel digital audio, multi-monitor support with acceleration, and so on.
To me, it's good to have a disk with the last version of ubuntu in case I need it. So if I download the disk and boot from it, I'll only download it once, versus downloading the iso + downloading the upgrade.
Also, the upgrade to a new version famously have many problems. I just tried it and it crashed in the middle :S
