Windows is unstable. Upgrades are even more unstable. In general.
The one exception I've found so far is, in fact, XP Pro. This very comp started out with 98se, was downgraded to ME, and then was saved by the XP pro upgrade, which has been running smoothly for the last few years.
I used the upgrade on my old laptop, too.
It is prone to some minor glitches (I notice that the cute little system tray icons have a tendency to come and go as they please), but for the most part, it's just fine.
What's even nicer is that you get to keep your files. The full version will wipe your drive. The upgrade lets you keep all of your data and the bulk of your installed programs.
As for pricing... you may want to look around a bit. As a student, you qualify for academic pricing. You might be able to find another vendor on the 'net which could save you a few extra bucks over the school store.
In short: It is a little more error-prone, but, in my experience, not $200 more. And keeping your data and stuff is worth something, too...
