I did just that myself - SORTA (mine was a Gen 1 HCH)

In June 2006 I traded a 2004 HCH for a 2007 TCH. I got $17,000 for the trade and I owed just slightly more than that, which was rolled into my new loan.

I got a base TCH for around $26,700.

Pluses for the HCH over the TCH:

1. Obviously, better mileage. I had a lifetime of about 48.2 on the HCH, and now sit at 36.1 for my TCH.
2. My car payment with the HCH was about $200 less than with the TCH.

Pluses for the TCH over the HCH:

1. Love, LOVE being able to drive in EV Mode with no gas engine. It's a really cool trait of the Toyota HSD system and I really love to work the car into EV mode as often as possible.
2. The TCH is just so much nicer of a highway car. Tight and quiet and holds the road very well.
3. The extra interior room. My kids are 8 and 10 going on 15 and 17, and I needed to expand the interior to account for their upcoming growth. The HCH is much smaller inside.
4. The TCH is a better looking car, IMHO. Nicer lines, better overall look of luxury.
5. The stereo in the TCH is much much better too.

So I have thoroughly enjoyed the upgrade to the TCH over my old HCH. I long for a 56 MPG tank like my best HCH tank, but Oh Well I can always buy the 2009 Prius and get 80+ if they hold to their promise !!!

Good luck either way. The HCH is a very nice car, but the TCH is just a little notch above it - for MY needs anyway.