XP Pro is intended more for business use and has better encyption/security etc. For most, Home edition is more than adequate.
Regarding upgrade or full product, do you have a full version of 98? If yes then get the upgrade. Note though that if you only have a recovery disk or similar, you may not be able to do it.
If you do take the upgrade, do a fresh install. Don't install on top of W98 if you can avoid it as you will carry over all the rubbish you may have on the machine as it is now.
Doing a clean install with an upgrade disk will give you an entirely new system. It will ask during setup to insert the qualifying disk (W98) just to prove you have it and it's plain sailing from there.