It really was about time that preupgrade was replaced, as far as I know it was only ever produced as a short-term solution to upgrading Fedora without the need for booting from CD/DVD/USB/PXE and going through the Anaconda upgrade process. It was a proof of concept if you like. It's also been openly described within the project as "just a set of hacks" and other such non-complementary terms. So why the need for something new? Well I think that's already been best described elsewhere buy the guys behind Fedup so I'll just point you at a little background information on Fedup instead.
Having tried it first at work to upgrade a virtual machine from F17 to F18 I found that Fedup actually works pretty well, in fact to the user it doesn't really appear to do much differently to preupgrade. You simply start the tool, tell it what to upgrade to, wait while it downloads the packages, then reboot to perform the upgrade, all done. I recently tried it at home as well and it worked perfectly, no issues at all, which seems to be the experience of all the others users I've talked to about using it as well. So far then it's a bit thumbs-up and thanks to the Fedup and Fedora teams for making it all so easy for us.
The one pitfall is that you can't upgrade straight from F16 to F18. Traditionally with Fedora you can jump a version so you've always been able to upgrade directly from any current Fedora version that hasn't gone end of life yet to the very latest without going through intermediate versions. Between F16 and F18 that wasn't possible though so if you're still on F16 you'll need to preupgrade your way through F17 before doing a Fedup to F18 if that's where you want to get to. However, from F17 onwards Fedup should support the same version jumping as preupgrade did, it's simply that Fedup isn't available until F17 that causes this particular issue.