I do the second option, usually 3-4 times, running a few days between drain/refills, and do it while it's hot. You will drain right at 3 quarts each time. I drain with a funnel into an empty gallon oil bottle with the measuring window in the handle. Then, I just refill the same amount of clean fluid. I think it's a bit less of a "shock" to a high-mileage transmission than flushing.
I actually just went through this last month. Now that I have clean fluid, I've decided that I'm just going to do a single drain/refill each time I change the oil. It's good insurance, easy to do and not that expensive.