Don't forget to look into options other than MS products when you decide to stop using XP (since somewhere along the way you'll end up having to reactivate XP or activate it for the first time installing it on new hardware). Don't forget about other options, like MacOS X and Linux.

I, for one, avoid a great many Windows worries by using Linux almost exclusively. I do have a Windows 2000 (SP2, as the license issues for SP3 are just too restrictive for my taste) system, but that's only a necessity because of my line of work (I consult for clients that use Windows).

Among Windows products, you might look into Windows 2000 instead of Windows 95 or 98, too. Win2k is, without a doubt, Microsoft's best operating system to date. It still falls short of Debian GNU/Linux, but there was a time when it was my primary OS.