Over the last 12 years at work I've upgraded all the office machines from Win98 to XP and then to Windows 7. Both times needed massive hardware upgrades, but that was a good thing because it meant that old hard drives were replaced before they broke, and despite each version of Windows being more of a resource hog than its predecessor, the upgrade increased overall performance.

XP has already had its life extended - when Linux based netbooks like the Asus eeePC came out a couple of years ago Microsoft saw an opportunity for a stripped down XP in a machine that would never run Vista or W7, and kept it going.

Windows 7 running here on a two-core AMD CPU, 8GB of RAM and Solid State Drive. The SSD makes a huge difference in boot and application load times, and Windows 7 is very stable.

Just avoid Windows ME, Vista and Windows 8 and you'll be fine.

I do have a PC at home that dual-boots XP and Linux, and I'll certainly keep that on XP for at least a year.

When support ceases, XP will first become an increasing security risk because of the lack of updates, but eventually it will start becoming becoming safer again: as its numbers decline, it will become a less attractive target for malware.