Hey, Ellie. Yes, I'm definitely in the same boat with you. But I ended up switching to Windows 7 and the later version of the Office as well, and here is why:
Windows XP, Pros:
1. Easy to use, has interface we all got used to.
2. Doesn't have many software conflicts. (Older software was running just fine.)
Windows XP, Cons:
1. 32-bit versions (which is most of the older systems) have a limit on the amount of memory, i.e. RAM. And even though BIOS could technically recognize up to 4GB, the OS allowed up to 3GB to be used by programs and that becomes a real limit these days. I run a video/image editing software that becomes very sluggish with just 3GB of RAM.
2. Insufficient security architecture. Most computers were shipped with default user accounts set up as administrators that posed a big security risk -- any virus had a complete control over the system. VERY BAD thing! On top of that, the less privileged user accounts weren't designed to be used for an "every day" life -- they were too restrictive.
Windows 7, Pros:
1. Much tougher security model that is less annoying than Vista's. If you don't run your default account as administrator you can eliminate 80% of the attacks just by that (coupled with the knowledge of your system and what not to run.) Also provided Internet Explorer and various add-ons it may house don't have gaping security holes in them. (Example: recent security breech in Adobe Acrobat, or Microsoft's own video driver "hole"). But any self respecting PC user these days doesn't use IE anyway, right? Your best bet to protect against web attacks is to stick with a less compromised web browser. My choice these days is Google Chrome. Yes, and not Firefox. The latter one has become too well known to have his own downfalls. But it comes a good second on my list though.
On the side note to protect yourself from a good chunk of web attacks you need to follow a couple of simple rules:
A. DO NOT use IE. No matter what Microsoft tells you about it, that web browser is prone to the most of Internet attacks. Since you can't remove it either (it is used internally by the OS itself), install some other browser like Firefox, Chrome, or Safari and set it as a default one.
B. REMOVE all add-ons, toolbar items, etc. from your browser. Stuff like Acrobat Reader toolbar add-on, or Skype add-on. All that stuff can compromise your security a big time even though the developers of the browser itself made it safe. On top of that you will make your browser run faster.
C. NEVER install any "helper objects" from web sites. And I mean NEVER. Sometimes you may go to a site, like some image or video hosting one, which to upload content to their servers provide a "nifty" interface. DO NOT install it! That add-on could have a gaping security hole that the makers of the web browser have no control over. Those sites almost always provide an alternative (browser backed) way to upload stuff -- look for small print. Use it instead.
OK, back to Windows 7 pros:
2. Support for larger hard drives and larger banks of RAM (with 64-bit CPUs, which come in most all new systems now)
3. Some added features that are actually helpful. One that comes to mind is the ease of safely removing a USB flash drive, or various ways to set up your desktop or a power scheme for the system.
Windows 7, Cons:
1. Completely redesigned Windows Explorer and the taskbar. Sorry, Microsoft, I'm REALLY missing a non-grouping classic-style task bar. I'm also like a fish out of the water without the Up button, as well as Cut/Copy/Paste buttons on the Windows Explorer toolbar. GET THOSE BACK!
2. Redesigned Open File dialog where the "Look In" drop-down box acts as the Address Bar in IE and not the way it used to be in XP. I'm REALLY missing this feature.
3. Lack of native customization for people who'd like to switch back to the old styles.
4. Incompatibility of older XP type software. Most of it was Vista's curse, so I'm not putting it up top. But that is still a big issue for people switching from older versions of the OS. But, if all you use is a web browser and a word processing software, then you'd be OK.
CONCLUSION: So, as you can see, in despite of some visual design flaws, Windows 7 has something to offer. I switched because I knew that Microsoft will soon phase out XP and I didn't want to be left out.
As for the Office 2007 and now 2010, I'm totally with you. I don't know why they decided to totally redesign the toolbar in favor of those ribbons. Our whole office at work was yelling and screaming when it first came out. In the long run though, after a couple month learning curve, I think I like this new design in Office 2007/2010. I think this is how Office should've been laid out in the first place and we simply got used to the wrong way. If you look at it, they grouped all the buttons in the correct order that actually makes sense. It doesn't help though, for people that got used to the old style. My advice, get it on a new system and learn as you go. You'll like it in the end. Added fonts and design elements, plus the ease of formatting and visual clues really help in a long run.