The armor upgrade changes it looks, but also makes it quite slow. I prefer getting it the weapon upgrade. ED-E mainly is a floating storage to me anyway.
He gets a new set of clothes with the weapon upgrade, too. It looks like a weathered version of the BOS armor, and he loses his bumper sticker and license plate, which is too bad - I thought he looked kind of cool with those.
I took his armor upgrade on my first playthrough, and will probably take the weapon upgrade on my second try. I also use him as a floating pack mule, but I really like his perk, too. My character is a sniper, so it's nice to have advance warning on any baddies out there.