I resisted the xp thing for as long as I could (was using ME and 98) but this year at school, one of my programming classes needed new software. So, they gave all the students the software and a copy of windows xp pro to run it on. (It wouldnt run without XP)
I reformatted my laptop before i installed the xp pro and it runs great now. much more stable than it was before with 98. Also, i just recently purchased a new desktop that had the home version of xp preinstalled. I have no problems with it either. They both work fine for me.
On the other hand, someone i know installed xp on a machine that was running 98 without reformatting first and he had all sorts of problems.
So, if u are going to upgrade, my advice is save everything that is important, then reformat first, then install the xp.
Another thing to consider is the fact that the software i needed would not run without XP. this is the first program i have come across with this requirement but it may be a sign of things to come.