You Select "Something Else." I have just converted my 11.04 to 11.10. And I did not lose any data or settings.
When the partition manager opens, you select each partition in turn and click Change and then mark those same partitions with the same mount points as they have now but you do not, I repeat do not, mark the /home partition to be formatted. You can mark / and /boot ( if you have one ) to be formatted. This will clear out completely any old files that may conflict with the new install.
In this way the relevant parts of Ubuntu will be installed into / and /boot but the /home partition will not be touched.
You will need to re-install any programs that you installed since 10.10 was installed but they will detect their configuration files in /home as will the default programs for the install.
May I give you some advice? Before you install backup Evolution and Firefox and install Thunderbird and import your Evolution settings/emails into Thunderbird. Do this because Thunderbird is the default email client and not Evolution. So, if you have already converted to Thunderbird you will have email from the beginning without having to install Evolution. Unless you prefer Evolution.
Backup everything just in case.