When the 8.1 preview is available, Windows 8 and Windows RT users will receive a Windows Update notification. That update will trigger the new bits to show up in the Windows Store, where potential testers will be able to read the description and choose whether or not to install.
Once the final versions of Windows 8.1 are available, after their release to manufacturing, those who have downloaded the preview will get the same Windows Update plus Windows Store notification. While their data and accounts will be preserved if and when they choose to install the free, final 8.1 release, all their apps must be reinstalled, Niehaus said.Microsoft Explains Windows 8.1 Upgrade Procedure [zdnet.com]
For those wondering exactly which apps will need to be reinstalled, it depends whether the tester is running Windows on ARM or x86. On Windows RT devices, it's the Windows Store/Metro-Style apps that will have to be reinstalled; for x86-based Windows 8 systems, testers will need to reinstall both their Windows Store/Metro-Style and Desktop apps, a Microsoft spokesperson said.
This is aimed more at developers and people who want to be on the cutting edge rather than your average customer. The regular 8.1 update will essentially run just like any other Service Pack.
Apparently if you do opt for the Preview version then you're going to have to reinstall everything when the full version comes around, so the warning here is to be prepared to start over from scratch at that time. Most people following this path would likely do it on a virtual machine or a system that is not primary to their work. I certainly wouldn't want to take the time to reinstall all my software and system settings on my main machine.