I have so far upgraded 5 computers from ME to XP Pro - all following the upgrade path, and all resulting in very stable and reliable systems. Clean install is largely a myth if you take the time to "prep" your old system completely before the upgrade.
My first choice is always to upgrade - clean install is the court of last resort, often dictated by a poorly maintained OS in the first place. If the upgrade doesn't work - then of course, do a clean install. The problem is that many users do not maintain their systems in tip top working order to start with.