V's should be fine, even in mud they're ok but need longer to bite (and admittedly won't work as well as disks when they do) - as mentioned, in the dry they can match up to disks, or close enough. Unless you're fitting something like XTR V's, the biggest improvement in braking might be with better pads - tho' the same may well apply with OEM disks if you did decide to stretch to them. And if you did, it'd be worth checking out the reviews on mtbr.com to get a flavour of how they compare, they'll be the budget end of things and I suspect there may be a bit more variability between 'em.
First bike I bought with disks wasn't 'til '04 - in fact it was s/h from a mate who'd bought it for a trip to Morzine that a bunch of us did the previous summer. Three of us with V-brakes, no problems with at all, whereas most of the rest of the group with hydraulics were having trouble with arm pump/brakes overheating etc. Admittedly frequently steep cross-country stuff rather than proper downhill runs - there's lots of great climbing/descending outside of the alps trail centres - but illustrates they're more than up to the job. In fact the couple doing the guiding for us ran V's too, on the basis they could fix 'em on-trail..
Might be worth adding - hydraulics *tend* to be fit/forget, but if they need bleeding they're a bit of a faff unless you throw it to the LBS, and if the seals go on the trail, yer stuffed - eg if your front caliper went (which is where most of the braking should be coming from) you can't even swap it with the rear. A good alternative is Avid BB7's - probably the best of the cable operated disks, and a spare cable takes almost no room in your seat pack - tho' like XTR V's they're not a cheap option.
One thing that might be worth adding is that a bike with V's might not have disk-compatible hubs, in the event of ever wanting to put disks on later.