I'm still using 98SE, but am contemplating upgrading to XP before MSFT stops selling them in June. I only have 256MB of Ram with a 1GHZ AMD processor, which was top of the line when I bought this thing 8 years ago. The motherboard is upgradeable to only a max of 376MB, but I don't think this would be adequate for decent performance because on my laptop, I have XP with 256MB of ram , and a 2.66GHZ processor, and it is very sluggish.
I have seen offers in a flyer from a giant computer store for a combo motherboard, 2 GB DDR ram and a 1.66 GHZ processor, all for 90 bucks.
The only reason why I would need an OS upgrade is for support of new audio hardware and other hardware. From what I've read, Vista requires a ton of Ram to perform adequately. An XP upgrade would cost 89 bucks. My current processor and Ram, old as they are, plus my 3 hard drives with a total capacity of 850GBs, suits my needs since I no longer play games. But to use a flash stick or external hard drive to backup data, or a new audio card, or digital audio processor, I would need at least XP.