Hell yeah, I'd upgrade it. I used a Amiga 4.3 motherboard for over 2 years without a problem. I had an 68030 accelerator, SCSI Card with 2mb hard drive, Kickstart 3.1, 8mb of extra memory and a flicker fixer card in the video slot. It worked perfectly. The only thing I hear you may have a problem is if you ever decide to connect the Indivision flicker fixer. I hear the motherboard has some capacitors that will be in the way. Other than that, it worked fine.
note: I wouldn't bother with KS 2.04. In my opinnion it's the worst choice to make. I would go with KS 3.1.
Barney