I assume you are running 7.10? and you want to upgrade to 8.04?
8.04 is nice in that it tries to make the upgrade process go smoothly. I don't have experience with the upgrade panel, but I can say the CD upgrade works well. When you put the CD in, it will tell you that a new version of Xubuntu is available to install and would you like to do so (how nice of it...).It will even ask if you want to import your home directories if you install on another disk (nicer still...).
Aside from that, I have heard there are some bugs still alive that are varying grades of serious, so do an update SOON after you install. I haven't noticed any so far, but I'm still in the process of building up my new install.
I upgraded from Xubuntu 7.04 to 7.10 and it went well, but I found that upgrading like that tends to leave a lot of cruft, so this install I chose to simply pull a new installation to start fresh with 8.04. I noted all the programs I was going to need and backed up my home directory to a shared folder on my home network (a CD would do as well, if all the stuff could fit). It took installing twice to get it up, I don't know exactly why.