Some people think that xp is a bloated 2k. Somewhat true. You are going to have to work with it to find the new locations of very familiar utilities (they are in the same spots, but some are organized in a differnet fashion).
If you have a standard lifecycle for your machines, XP should be ok. Xp can be tailored to a standard image that is actually a lot faster than 2k. Disable the pretty colors and special effects. We run mostly XP machines with a minimum of; 256ram - 500cpu - 6gb hd. Our images are equipped with common appz, sp1, and an RPC hotfix. You will have to run some labs to test the compatibility between xp, the updates, and your current software. Block windows update with policies and use 3rd party patchlink to apply the updates that have been tested properly (if your organization is huge).
My advice...just do a couple of machines, keep the old boxes in a safe place, and let your clients work with the new XP in their daily routine. Once the myths and fears have been cleared up, start some more on xp.
What kind of network do you have? Are we talking about AD? Do you have internal appz? We have too many servers to mention - nt servers, 2000 servers, 2003 servers, an old Novell box that's still kickin' - all that with clients on NT4 (almost gone), 9x (almost gone too), 2k (about 10% left), and a majority of xp.
PS...if you are going to upgrade, now is the time, unless you want to wait for longhorn...2006->7->8?!?!?!?