What a terrible sales man.
It is true you should 100% do a clean install. I don't even know why Apple put upgrade install as an option. It just leaves you with a semi working machine really. You don't have to format your drive, but you really do need to do a full backup. Peace of mind, all that.
Perhaps he's a better sales man than I think, and he's trying to get you to buy a new MacBook Pro.
Leopard on my old 1.2Ghz PowerBook G4 is very nice and very nippy. They haven't filled Leopard with lots of new graphics effects that'll slow down your response time. At least not ones you can't turn off.
As for why to upgrade, Screen sharing and Time Machine are fab.
Obviously there's features in Leopard you can't use like Boot Camp, but it's a good upgrade, especially as it's had a couple of updates.