Do yourself a big favour, go to Win2k. Since SP2, 2K has been ROCK solid. It's a very good OS. The only downside to Win2k is really that it takes more RAM to run properly. With RAM so stupid cheap these days, that's not really an issue any more.
The only thing I would do before going to 2k is research any weird hardware. Things like game controllers, USB cameras, scanners, toejam like that. Check around about your video card as well. Generally speaking though, most of the hardware compatibility issues with Win2k have been worked out. It has been a long time since Win2k failed me in any way. It even runs old games flawlessly for me.
Oh, one more little anecdote for ya. My wife got a cheap IBM Stinkpad and used it with the pre-installed Win98 for a few months. It would hang, shut down, lock up, and all kinds of nasty little problems. I finally just formatted the thing and installed Win2k from scratch. That same machine is now rock solid and hasn't given my wife a single problem. No matter how badly she abuses it, that little sucker just keeps on chugging.