I agree. Disk space problems only arise if proper maintenance is not done regularly. I recommend putting apps and data on a separate hard drive from that which your operating system is installed on.
My bro is a computer guy & here is what MSN is planning to do with XP
MS is not going to provide updates for XP after 2008. Everything will still work on your computer. New equipment may not work but most vendors provide drivers for at least the last one or two versions.
Save yourself lots of potential grief and install the latest BIOS upgrade from your computer’s manufacturer first. It is sort of a dicey maneuver but after having done a half dozen or so I can say I have not had one fail yet. Just carefully follow the instructions to the letter. It is the only way to do a major software upgrade in my experience. I would do the same if upgrading Win XP to Vista.