I just completed an article about the CentOS to Fedora 12 upgrade: http://geek.co.il/wp/2010/02/12/upgrading-centos-5-to-fedora-12 .

To sum it up – it can be done remotely, and I think I’ve ironed out all of the kinks in the process, but its hard and dangerous. If something goes wrong, then its not possible to recover the server without physical access.