I see no record of Sony making a VGN-S28 model laptop outside of Taiwan, in which case it is still a VGN-S28TW. Is it possibly a VGN-SZ28 ?
If that is a VGN-SZ28 that is a very current laptop, it has a GeForce Go7400 video card. It would have no problems with Vista, but I only show it as having a 120GB Hard Drive. That is about the biggest you can get in a laptop for any sort of reasonable money. I see no reason you would have to upgrade to put Vista on there.
If it is definitely an S-Series, not an SZ-Series, then even their bottom-of-the-line VGN-S150 has an ATI Radeon Mobility 9800 video card. Not as current as the one above, but still well over the Vista requirements. but again, this one has a 60GB hard drive minimum, so I don't see how it won't fit Vista, unless you plan to dual-boot, keeping your existing Windows XP on there.
If you REALLY want a bigger hard drive, yes, they are replacable, but it tends to void your warranty if you crack open the case to replace the drive. All laptops use the same 2.5" form factor hard drive. If you go to a site like
NewEgg you can find them for cheap.