Should I 'reserve' my upgrade?
Yes. Choosing to reserve your upgrade means your device (computer or tablet) will be eligible for a free upgrade for a year. Free upgrades are only available each and every device that prompts you.
Should I upgrade immediately on July 29th?
No, I don't recommend jumping straight into it unless you have backups of everything first. Wait a week or 2 until all the issues have been worked out (same thing happens with Apple). Use the app in the system tray to tell if everything will be compatible.
Can I just get an ISO and start again?
Yes, ISOs will become available that can then be burned to DVD or used to make bootable USB sticks for the install. Your machine will then stay on the free licence after the install, as long as your computer previously showed you the 'Reserve your upgrade' offer.