1. Personally, I think it's best to install from a disc. Installing from the hard drive is not as fast as installing from a CD/DVD, and this is particularly noticeable during the "copying files" step. The disc installation completes this step very quickly, while the hard drive installation takes longer. This differs from the GHOST method (One-key Ghost V11) of the XP era, where installing from the hard drive was faster (of course, if your optical drive or disc isn't working properly, there's nothing you can do about that).
Moreover, installing via disc provides more options, such as formatting the system drive. However, if you're unable to install from a disc, then you'll have to resort to installing from the hard drive.