Salesperson is correct to say you will get another contract. And it is also correct to say the upgrade is free because the monthly cost won't change when you upgrade. You may not enjoy being forced onto a new contract in return for taking up an offer but it's hardly news - Virgin Media and its predecessors have been doing this for years, as have all the mobile phone companies. There are far more sinister practices out there at the moment (such as BT, which on certain packages automatically puts you on a new 12 month contract every year, so there's only one day in every 365 when you can switch away from them without penalty ... not nice at all).
Unless you have reason to think you'll be moving home in the next 12 months I wouldn't worry about it. Cable broadband, when it works, is a far better product than ADSL. You already know that you have a stable cable broadband service as you are using it right now. You don't know how well ADSL will work at your home.
Better the devil you know, I say.