An upgraded ship obviously has advantages over a non-upgraded one. A fully upgraded ship may even be able to take on ships much bigger than itself. It is also possible to smoothen out some of the weaker points of a ship by using a particular upgrade. The best example for this is Copper Plating.

Copper Plating increases the turning rate of your ship. You may fancy the Brig of War for its cannons and crew size but finding it hard to battle the smaller, faster turning ships. After adding Copper Plating, the ship might just be turning fast enough for you to perfectly suit your needs in that area, while still having the benefits that attracted you to that ship in the first place.

Keep in mind though, that ports only sell one type of upgrade and that some ports don't sell any upgrades at all!

	Bronze Cannons will increase your firing accuracy. Especially handy if you have a ship equipped with fewer cannons than the opposing ship and you have to make every shot count.
	Chainshot loads your cannons with small cannon balls, chained together. They can be fired at the masts and rigging of ships and their whirling action would inflict severe damage. This way, you can slow down both speed and turning rate of the enemy ship.
	Copper Plating can especially benefit slower ships by increasing their turning rate. Smaller, faster vessels will also see their turning rate improved but their need isn't as high.
	Cotton Sails will improve your sailing speed. How much seems to depend on the basic speed of the ship you're upgrading.
	Fine-Grain Powder is high quality gunpowder that increases the range of your cannons. It's especially lethal in addition to Bronze Cannons.
	Grape Shot targets the enemy crew, firing a load of small, 1" (some slightly larger) balls at the enemy ship. It's a great way of thinning the enemy numbers before boarding.
	Iron Scantlings increase the amount of damage your ship can take. Especially smaller ships benefit from this.
	With Triple Hammocks, you can cram as many men into your ship as possible. Your crew capacity will increase with 50%.

As you can see, all the above upgrades can enhance your ship considerably. For instance, a fully upgraded Sloop of War is a fast, lean, mean fighting machine that a skilled captain can apply in battle against even the largest ships out there. A well aimed salvo from the larger war vessels can still take it out though and you'll have to work hard to capture a big ship with its crew maxxed out.

On the other hand, some of the larger vessels, when fully upgraded, can make short work of medium sized ships. Of course a fully upgraded Ship of the Line with 450 crew aboard sounds pretty damn good too!