There is no *need* to upgrade Windows (or hardware) if the "old" system/OS does the tasks required. As I've frequently stated, I'm using a 14-years-old NT4 system at work that has been running 24/7 for the duration, other than the occasional reboot, shutdown for extended power failures or maintenance such as blowing out accumulated dust. It's used for an ancient DOS accounting package (Solomon III, which BTW is Y2K-compliant), faxing, minor bit of word processing, and keeping the business's web site updated. Win7 wouldn't do those tasks any better. That being said, I'm prepping to change the hardware just on the point of concern on age (although it'd be much more interesting to see how much longer the system will keep going). Problem is the voicemail/fax software won't work on anything newer than Win98 or NT (does not work on 2K). A stand-alone fax solves the fax issue, but not voicemail ... which voicemail really isn't so much needed any longer anyway. The accounting software works on XP, but I don't know about Win7 without testing. The Win7 system I have (see below) is 64-bit and Solomon does not run on 64-bit. So ... I'd like to go with XP if I can get it to install and activate.
I switched to XP from Win2K on my main personal system in November of 2010 at the time of a hard drive crash. The only advantage XP has (for me) over Win2K is ability to stream Netflix and run other media content that doesn't work on 2K ... but I can also stream Netflix on my DVD player and Roku.
I have one Win7 system, which was provided in May 2001 by (and belongs to) a different employer.