So very glad to know that all of your data is safe!
As for your “OS” dilemma...I just need more info, I guess.
I’ve been running Windows XP Pro boxes at home and at work for as long as that OS has been alive, and although the OS isn’t perfect, I can’t peg it with any issues. Nearly every software problem I’ve encountered has come from software NOT tied to the OS.
I skipped Vista entirely, and I’ve heard mixed reviews about it, but my HP laptop is running the 64bit flavor of Windows 7, and it’s been very solid, although the interface has taken some getting used to after all the years with XP.
I’ll add my voice to the chorus regarding OpenOffice (http://www.openoffice.org/); between that and Google Docs I can’t feature any need to fork out for MS Office.
LoM has been using OpenOffice on XP for a while, though with strange issues that may be related to other things.
I'm using it on Xubuntu and though it feels a little bit clunky (I AM using it on rather old hardware, lder distribution, and use MS Office 2003 a lot at work), the only complaint I've had is that one colleague exclusively uses OO on Linux; highlighting is NOT some the same way -- it takes some effort to discover the way to remove OO highlighting in MSO.