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I think the problem isn't related to the upgrade feature per se, but to version 8.04 itself.
My PC runs 7.10 with no problem whatsoever. My roomate has a Windows XP PC, which works as fine as a windows pc can Well... I run samba to interoperate with his machine and that works perfectly too.
One day I decided to move on to Hardy Heron (8.04), so to stay on the safe side, I installed the new system from scratch (which I agree is the best way to go regardless). After that I did all the fine tuning necessary, like reconfiguring samba and so on.
I was happy.... for 3 minutes! First of all, no more sound. I still don't know why. Second, no more network shares. Samba server didn't work, and the client didn't work either. I tried every possible solution I could think of, but still nothing. Plus, it took me three reboots to make it remember the screen resolution I wanted. As you can well imagine, I was quite disappointed and decided to revert to version 7.10, which I'm still using today.
My opinion is that 8.04 isn't ready for the public yet. I'll wait for version 8.10, hoping that things will get better. If not, I'll have to consider abandoning Ubuntu for another distribution.

S.