Upgrade, Install, RPM

- I have PostgreSQL 7.4.19 on CentOS 4.7 with no databases I need to keep.
- PG was installed with CentOS in /var/lib/pgsql.
- I am the only local user but I have Apache running on the same machine and plan to have web pages extracting data
fromthe database. 

I'm considering upgrading PostgreSQL and have questions/am interested in opinions.

- Is version 8.3 compatible with CentOS 4 as it appears to be. (I have all requirements listed in paragraph 15.2 of the
manual.)
- I like using RPMs to facilitate security updates (via yum) but the highest RPM version I found (on a quick search) is
8.2.3.It appears 8.3 improvements are largely performance improvements for high-volume transaction-processing
situations,right? 
- If I install from source, is there any reason not to install it in /usr/local/pgsql? Any reason not to install it in
/var/lib/pgsql(or var/lib/pgslq8)? 

Thanks for indulging,
Bruce