Upgrading was really easy (I upgraded about 15 engines before this one). As for TMCC vs. PS2, to me, it is a preference of which Command Control System you like. I personally like TMCC and the CAB2 controller over DCS. I find it easier to use than the DCS Remote, but again, that is my preference and I know there are many others who prefer DCS.
As for the install itself, I went the TMCC route using the Electric RR Cruise Commander and Railsounds board. I did this knowing that the sound board was actually for a UP articulated. So I contacted Lionel and found out that the Railsounds 5.0 boards for most engines were available, you just have to call to get it ordered (can't order it directly from the web site). I started this thread to inquire how to install the board with the Cruise Commander, which was easy using the board suggested in the thread with the addition of a jumper as I was not using a POT to control the volume. I actually did this same RS 5.0 board upgrade in an MTH to TMCC Santa Fe Northern (using the 3751 soundboard) and the C&O Semi-scale Yellow Belly (using the C&O F-19 chip set with the same Engine number (490)).
Other things I did with the upgrade included not tying the headlight and marker lights to the TMCC Board, so they are on all the time (forward and reverse). The reason is they are both on the same board which is tied directly to the Track Power, so I was fine with that. I did order some Green LEDs from MTH to replace the red ones on the front of the engine to be more prototypical. I also removed the smoke unit power cable from the light board and I split the power to the resistor and the fan so I could install the Super Chuffer from Henning's Trains. That gave me the great smoke effects.
On another note, I have upgraded an MTH PS1 E8 ABA set to PS2, and that upgrade was very easy as well - everything you need is in the kit. Again, it was my preference to upgrade to TMCC and not DCS just because I like the control and sound from Lionel better.
I hope this helps in your decision.