I went with a PCI solution and have been happy with it. The Emu card.
Have some limits on upgrades. Some of the new dual core abit boards have 1 pci slot. So I should still be ok for a while.
I don't think the 1.2 AMD had firewire...definately not USB 2.0.
So sticking with that computer is going to limit the choices.
I've put XP on 400 mHz computers and had them do better/ok.
I don't know, in your situation I think I would try the new hardware without messing with the os upgrade. Especially if your thinking of using XP home.
There are some 24bit pci solutions in the $100-200 price range that would work on your system.
http://www.americanmusical.com/sort.aspx?PCI=Audio%20Interfaces&m=07_24_388I like that place because if you go over $200 they break it up into 3 payments.