As with other programs, I prefer to download the setup, and then update the software. I did the same with Firefox too, and it has worked good for me till now, without any problems. However, I do perform a fresh install, whenever a major version change is there. I use the built-in uninstaller only. I do not like to go for a third party uninstaller, unless there is a problem with the built-in one. A few registry entries left behind don't matter to me.
I use FEBE to perform backup of extensions, bookmarks, passwords of my Firefox. It is a must have add-on for me, and works perfectly. I use it to restore the extensions back to Firefox too. I have it scheduled daily to take backup.
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Anupam
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