Kate:
Our office is the same size as yours. We run a mixed bag of OS’s (98SE, NT4 and XP Pro) We use NT4 Workstation as a file server. We share DSL through a router. We do not share applications.
The XP Pro (full version) replaced another NT4, on a 550MHz Pentium III, with 1Gig of memory. We installed the XP Pro clean, repartitioning and re-formatting the hard drive beforehand, which is an option when you run the XP installation. After the OS was installed and registered, we immediately visited the Microsoft Update site for all the patches and applied them.
Next, we installed Norton Antivirus, visited their site for all the updates and applied them. Zone Alarm (a firewall) was installed next, and finally all the apps were installed. We restarted the machine after every install, whether the system required it or not.
After 6 months of use, the upgraded machine (which happens to be mine) appears to run the apps and generally function about the same speed as it did with NT4. The biggest difference is stability (virtually no blue screens crashes) appearance (its nicer to look at) and greater compatibility with a broader range of hardware and software than NT4.
We continue to use the other OS’s even though they may no longer be officially supported because they serve our needs. Microsoft provides patches and updates for them, and the applications work satisfactorily. We keep our Antivirus and Firewall utilities current and use good passwords.
For us, the greatest motivator to replace the hardware (a get a new OS in the process) is need. Things such as USB ports, media card readers, DVD players and wireless capability. There are situations, however, when an application upgrade may force you to upgrade the OS (otherwise it won’t install) and the new OS has its own hardware requirements.
I suggest you map-out your software and peripheral hardware needs for the next year (a crystal ball will help) then determine if and how these needs drive the necessity to upgrade both hardware and OS’s on your current machines. Almost every software and hardware item specifies minimum requirements. Ask your users if they are happy with the performance of their PCs. Make them get specific on their likes and dislikes, then separate the real-world stuff from the rest.
Full OEM version of XP Pro was available from www.viosoftware.com for $140 last time I checked. If you do not need paper manuals this can save you money over the retail boxed version, otherwise they are exactly the same.
Good Luck.