Here's a question- is Civ 4 a big enough upgrade to justify purchasing it since I already have Civilization 3?
Depends on your playstyle and much you like mods.
Civ IV added 3D graphics and reduced micromanagement in some parts, but also added new things, like more flexible government choices (you sort of do mix-and-match) and unit promotions (units get combat experience, which you can use to customise them), additionally, a lot of stuff was reworked in more subtle ways (culture, combat etc). Some CivIII players dislike CivIV, because they prefer the 2D graphics and because they like the extra micromanagement as fine tweaking. Personally, I like CivIV a lot, but I then I never liked CivIII a lot, I preferred Alpha Centauri and CivII over CivIII. CivIV, in my opinion, beats both because it sort of takes the best aspects.
If you like going into every detail and tweaking stuff here and there and find 3D graphics to busy (or to heavy on your machine), you'll probably dislike CivIV.
Furthermore, CivIV is heaven for modders, basically everything is moddable - but it's more complicated to mod, because you can actually change the game engine code. This, however, also means that there are very excellent mods out there (mainly on apolyton and civfanatics).
If you get CivIV, I recommend getting Beyond the Sword as well (skip Warlords, apart from the scenarios, everything is in BtS as well) - or get one of the complete sets. It adds a lot of stuff (better espionage, some extra civilisations, great Firaxis mods, some balancing, warlords, extra wonders) and a lot of mods rely on it, if you're into that thing.
Cheers, LT.