I upgraded to Tiger yesterday. I knew I was going to be traveling and its always more thrilling to update right before a big trip. I did the smae thing with Panther. Go figure. I used Synchronize Pro to make a bootable copy on my firewire drive (Carbon Copy Cloner would work as well) and then did a straight upgrade. I heard about an alternative after I was done: do a wipe and install and then use the OS X feature that transfers your data and applications from an old machine to get them from the bootable copy. That's a good alternative if you're someone who likes to start fresh.
The update went flawless and I haven't noticed any big show stoppers. As usual a few applications needed updating (like Quicksilver). If you're having problems, this list of incompatibilities and workarounds might help. Also, you can take some comfort in the knowledge that Apple has said their freezing much of the API aftger Tiger. Until now, every major update changed the API in significant ways and that's not a recipe for application reliability.
One thing that annoyed me: Tiger came with a trial version of Office 2004 and whenever I opened a Word doc, it used the trial version instead of the copy I own. I blew away the trial version and reassociated the Word documents with the application and now everything is cool.
So far, I'm most excited about Spotlight. I've been trying to use it as a replacement for Finder and it does a pretty good job. I also found this article on using smart folders to be helpful as well. Smart folders are enabled by the same index that runs Spotlight.
At this point, Dashboard is largely underwhelming. Maybe I'll get into it, but its not nearly as useful as, say, Expose has turned out to be.
Some people have complained about the new look for Mail, but I like it. I think its an improvement. I did take the time to customize the buttons. I like the delete and junk buttons to be separate and separated by some space so that I don't hit the wrong one by accident.
Also, finally, you can swap the control and caps-lock keys without installing some patch that breaks everytime Apple updates the OS. Just go to the keyboard preferences and voila!