I am assuming that you are in Lion, (10.7.4) and want to move into Mountain Lion. The short answer is an "in place" installation will work around your content and settings leaving almsot eveything as you had it. Some things that most profesionals recommend (alhtough I am not a profesisonal.)
Be sure to back up your data before installation. Do a cloned and a time machine backup.
Be sure your install volume it in good shape by veriftying the disk and perhaps doing a permission repair.
Shut down ALL your applications before you install things
Make sure your energy saver is set so the computer never sleeps. You do not want your Mac going to sleep in the middle of the installation.
Make sure your MBP is plugged in before you start.
You can start in Safe Mode (hold down the shift key when starting) to be sure that no login items will interfer witth the installation jsut before you do the install.
I strongly recommend you get the ebook "Take Control of Upgrading to Mountain Lion". It costs about $15 but it is very worthwhile. It leads you step, by step through the proecss explaining things in detail at the layman level.
I've made an in-place installation of Mountain Lion on three Macs now (two iMacs and one MBP) without a problem. You will have to go back into some of the preference panes to be sure they now reflect how you want to operate. The book also leads you through that process.
Good luck. Mountain Lion is a treat!