I have upgraded 3 of my tanks I have always used the sand without a problem. I do keep my sand clean by fanning it a little when I do a water change just enough to bring up the dusty stuff on the surface. I also have nassarius snails that keep the sand stirred up.
As far as using the water there is a couple of thoughts on that some say it doesn't make a difference and others swear by it. The ones that say it doesn't matter says it doesn't have any bacteria in it, which they are right. Those that do says it makes a difference on the algae phases and the cyano
bacteria. I did it both ways and I did find the tank that I used the water on there was no cycno battle. About 4 months in I find I get a little cyano
for some reason.