I was also hesitant to move to WP8 because of everyone complaining about Xbox Music. Once the 920 went down to one cent on contract and GDR2 was released I thought I'd give it a try.
I found that the program to synch music from the PC to the phone was terrible. You could only select entire albums, but not specific tracks, for example. Additionally, the music took up much more storage on the phone than it used to on my WP7 using Zune. So I deleted it all from my phone and ended up doing copy/paste using Windows Explorer instead. This gave me the control I needed and also converted the files into sizes I was expecting. I am happy with that.
I will say that all of my music was ripped from CDs using Zune. I don't use any cloud music services and haven't used Zune Pass or iTunes to buy anything so can't speak to how WP8 works with those.
One pleasant surprise on the 1020 I ended up getting is that there is an audio leveling feature that will play back all tracks at the same volume. It used to be some of my albums would play back much quieter than others requiring me to adjust the volume. That is no longer the case. This is a Nokia feature and not WP8, so I don't know if HTC or Samsung offers anything similar.
Another complaint I read about was overall volume on WP8 being too low. That does seem to be true, but I rarely use headphones so it is a non-issue for me. I simply increased the volume on my car stereo.
The visuals on WP8 are not as appealing as they were on WP7, but I care more about the music than the picture of the artist and so don't mind much.
So, generally speaking, I would not say that WP8 is an upgrade to WP7. I would call it more of a give and take migration. Overall, given the additional storage, audio leveling, and killer camera of the 1020 I am happy I made the switch.