Your upgrade options are limited by your personal budget.
The thing you need to decide is how much do you want to spend for a phone, as this will dictate what you can upgrade to (and if you have to include discounts, that might limit you even more than buying outright).
Since only you know what you like as far as looks, phone features, and carrier services like text messaging, email, web browsing, etc. So I will assume that having
Edge capability for using the internet is important to you? You'd of course have to have a data plan (extra cost) to use it.
The V557 is a good option, but if you plan on doing moderate to heavy internet useage, you really may want to consider something with a larger screen. Like one of the smartphone/
pda's that have larger screens (again more cost, even with a discount). Otherwise you'll be stuck with Medianet (which I personally find slow).
Also how much are you willing to spend per month for the phone service and data plan?
So the two important things to consider:
How much are you willing to spend on a phone?
How much are you willing to spend per month to use a data plan that allows you to use
Edge for faster web browsing?