My wife and I are in the "contemplation" stage of altering our computer situation. A lot of this depends on available funds, which may or may not be there. But we would love some input from those of you who have been through the process before. Here is what we have
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A few components,such as a larger Hard Drive (seagate makes a very good very stable one with a 5 year warrantee)and a replacement for that creaky old CD/DVD writer would be a good investment. If it were me, I'd buy a HD, install XP onto the new drive and migrate what I wanted from the old drive.
Also, I'd recommend an effective backup system if you don't already have one in place. I use a set of two Seagate - "freeagent" external USB HDs with an automatic system for backing up my data. One is attached to my puter, the other is in the safe deposit box. When I visit the bank, I unplug and bring it along for a swap with the bank held HD. In this way, a house fire wouldn't burn up our family photos and business records. It's as near to perfectly safe and automatic as can be done in a home environment.
Best a luck in your computer adventure!
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