reinstalling without formatting

Is it possible to re-install windows on the same drive (removing the old version) without losing functionality of some of my software?

Some programs lose functionality if I reinstall windows on another drive, can I avoid this by installing on the same drive but without formatting that drive?

No, the only way to do that is with an image like Ghost and in that scenario you won't get a clean version of Windows. Now if you rebuilt a clean Windows installation with all your programs installed and the created the image, you could always revert back to it in the future and it would be as good as a clean install on every restore.

Not really, but what you may find is that it doesn't take that long to re-install the software. For example, you wipe out windows and re-install and say you go to re-install F.E.A.R, it goes from disc 1 min to insert disc 5 in ~1 minute and that's it.