I think it sounds as though you have what was a "branded" system...and now you want to install your own 'full' version of Ultimate x64? If this is the case...yes,wipe all backups of the original (only if you have backed up any stuff you wish to keep),then do a clean install after formatting the HDD. Far less problems that way. As far as backup is concerned.. my favourite is Acronis but there is a free one called Macrium,
Macrium Reflect FREE Edition - Information and download which is also very widely used by Techs. Don't do your backup until all updates for all programs have been done, use MS updates to do as much updating as it can,to avoid driver issues . Hope this has been of some help, mate