It's a tough call. Personally, I don't like the upgrades. If you buy the full edition I think you would save some hard drive space, plus you wouldn't have anything lingering over from the previous OS.
Also, if you want to get Windows XP and save some money wait until Windows VISTA (the next OS) comes out (sometime in November I think). I'm positive the price for XP will drop. It's too long a wait for me, personally, but if it helps...