No you do not need to format but you would need to repartition your harddrive, so as to make some space for a new linux partition. A RedHat Full Installation should not go over 2.5 GB(At the most), I am not sure about it though. And yeah, certainly there would be a difference between RedHat 7.3 and RedHat 8.0, like new softwares, updates, bug fixes and etc.