Why is 2010 release a must re-install?
it is a required install because people were starting to get impatient and an upgrade path would have required months of preparation and manual user intervention required was above acceptable limit.
Is it possible to just do the traditional apt-get dist-upgrade when this is out or is the live iso install better?
not sure what you are asking here. If you are using pclinuxos2007 or pclinuxos2009, then you will have to reinstall pclinuxos2010 because "apt-get dist-upgrade" will not work.
If you have pclinuxos2010(currently at beta1) installed, you can update your system either through synaptic or with "apt-get update" followed by "apt-get dist-upgrade". Be advised that this distro does not use "apt-get upgrade" and the use of this command will sooner or later bork your install.
the live cd is currently the one way to install pclinuxos