I'm trying to upgrade my Alfresco CE version from 4.2.0 to 5.2.2, however from reading online documentation I see that 'in-place upgrades' of Alfresco's binary and configuration files are not recommended. What is the best way to upgrade an existing Alfresco installation if creating a new installation is not an option?
There is no Alfresco CE version 5.2.2 - that would be an Enterprise Edition version. It is true, that in-place upgrades are not recommended / supported when your system has been / is being setup using the default Alfresco installer. I never use it and almost always do in-place upgrades, because I have full control over every component, and can back them up, upgrade them or roll them back individually at any point in my upgrade cycle. The installer provides a monolithic installation, and it would be far to brittle to try and upgrade that in-place, so a new install and copy/export&import is always the only option.
As that documentation page states, all the software listed in "Installing additional software for Alfresco Community Edition" will / can be installed using the installer, and it is optional to install them manually instead of having the installer do it (they can be disabled during installing).
There are no concise / singular installation instructions for doing a proper, non-monolithic installation without using the installer in the documentation. There are various documentation sections that address parts of the install procedure, and it is up to the user / administrator to figure out what they need for their environment.