There's too much spark in the priceing forums so I'll ask you here. The ultimate will be 400 bucks right? or 270 for the upgrade. Does that mean I can buy the upgrade and just install it with my winxp cd? Next question: The version below it is much cheaper...what is it missing? Next question: What one is the best for gamers.
Home Premium I would imagine would be the most popular version. There is no particular reason to get the Ultimate version unless you want to create a HTPC and have all the features. I would think that you could install with XP then upgrade as you said. That is of course the whole point of an upgrade disk, but I'm not sure if you would be able to install a 64-bit version of Vista, upgrading from Windows XP 32-bit.
With Vista, still far too many unknowns re upgrade paths and there's not much point worrying until the product hits the shops. With previous Upgrade versions all you needed to do to install on a blank HDD was slot an older qualifying OS CD in the optical drive for a few seconds when asked. Hopefully that will stay the same.
It will probably remain similar, maybe requiring the key to be input or something alike. If I were MS, I'd wait with the upgrade validation process untill Vista has installed, and you are about to activate it. Then you need to validate (from the internet) XP first, and the validate & activate Vista. But that's probably just some wishfull thinking
My point, no one (outside MS) knows for sure. I'm sure MS read the many constructive criticisms of their software (like the start-up sound furore), but whether they act is their commercial/PR/technical decision. But their aim is to sell Vista in great quantities, so I'm sure they'll make the upgrade process simple enough for the average dumbo to understand. Which is just more speculation...