There is no sensible reason to upgrade from XP to Vista as most machines that came with XP will not be able to run Vista.
There is no NEED to upgrade, XP is a fine OS, but there is a want to upgrade to Vista. A good detailed review of Vista is here
Vista Review
And the "eye candy" part is great on appropriate systems. I haven't upgraded yet, but many people just like new things whether we need it or not.