Not sure where you're getting your prices....but looks like the upgrade should cost about $115, which is reasonable.
Mac OS X 10.5 will cost about that much when it is released next spring. Thats pretty reasonable for an operating system upgrade.
However, I can't see any compelling reason to upgrade to Vista. WinFS might have been a good enough reason, but they took that out. Vista looks like just more bloatware and eye candy.