Speaking of upgrading-- I'm about to finally bite the bullet and ditch Win98 entirely, since new video cards don't offer Win98 driver support anymore. I've been running a dual-boot system-- Win98 for games, Win2K for stuff that requires it. I've heard that XP has better legacy gaming support than 2K. Any truth to that?
No truth whatsoever.
The only major thing is that XP has the Application Compatibility tab, but this can be added to Windows 2000 quite easily (It's in a folder on the install CD IIRC).
If you mean DOS games, then both are much worse than Win98, but we have DOSBox which works with almost every DOS game worth playing now

It also gives us one thing that we can't otherwise have: SoundBlaster and GUS compatibility. I really wish Creative Labs were not such a crap company; They could have easily kept ISA AWE-32 support in the Live! and Audigy cards...
And if Gravis hadn't died Creative wouldn't have such a monopoly on sound cards now! IF if if....
For Win32-based games, both XP and 2k are the same - Both can't play Glide games on a Voodoo2 properly, and stuff that is written a bit too close to bare-metal (Shock2, MW3, DF2: Jedi Knight, Project Eden and XvT are some that spring to mind) either won't install, won't run or will run equally weird in both.
The same hacks that you can use to get them to work in XP also work in 2k.
My current hope is that WINE reaches a level where it can emulate Win98 pretty well, then I can drop Win98 and just dual-boot Gentoo and 2k instead of all three.
I only stopped quad-booting a couple of years ago since DosBOX became mature enough to run stuff!

The ONLY reason to get Vista is hardware support, but that's the thing that pisses me off about all versions of Windows:
Win98 is perfectly capable of handling things like IPv6, NTFS, USB Mass Storage devices etc - It's just that MS won't write the drivers for it to try and force you to upgrade to the new version, even if you don't want all the crap that comes with it!
This is what I've liked about Linux; You don't have to re-install a completely different system just to get, say, WiFi support or USBirewire3941zzalpha support.
IMHO, Microsoft should turned into public company - I've always held the belief that infrastructure should NOT be in the hands of a private for-profit company.
Things like utilities and comms for instance. In the UK, a lot of our public services were privatised, and it's been disasterous - Quality of service has dropped like a rock as the companies chase profits and shareholders above all else,
Either that or they be forced to open up the API so that other firms can write their own versions of Windows without being sued up the ying-yang.