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nordlead said:

There is no reason to upgrade to Windows 7 with old hardware unless you need some of the features or some software you want to run must have it. So, you might as well save your money and stick with XP.

I know Slimebeast was referring to something else but, just to note, XP support from Microsoft and Google is dwindling--lately there have been more than a few announcements of software/products without XP support.  It's pretty clear that it is being phased out at this point.  XP isn't going to stop working tomorrow, but saying there's "no reason to upgrade" is very shortsighted with so much writing on the wall.

Right now is actually a very good time to switch to Windows 7.  The W7 communities are very active so there will be lots of assistance if you have issues and, since XP hasn't been fully abandoned, there's still quite a bit of time to get used to Windows 7 before an actual "must-have" piece of software is announced without XP support.