I'd suggest taking a good hard look at the
Hardware Compatibility List. Download the text version if you don't have the patience to deal with the dorky Web interface. There are some systems, even older ones, that are better supported by WinXP than by Win2K. My 500 MHz PIII notebook is much faster and more stable under WinXP than it was under Win2K SP2, for instance.
And WinXP is most definitely not just Win2K with a bunch of frilly crap added. At base it's a better OS. Given the first service pack, I think it'll tower over Win2K. At any rate, my experience with WinXP has been that it is a more responsive and well-thought-out OS than Win2K (on a wide variety of desktops and notebooks). BUT -- and this is an important exception -- if the device / driver support for your hardware is iffy, you're better off with Win2K. Win2K gets grouchy when you feed it a bad device driver, but WinXP goes all the way South.
Suggestion: Whichever way you go, learn the OS before you start tweaking it. So many people are barely finished loading Win2K or WinXP before they start asking other people (who know barely any more about the OS than the newbie) how to "tweak" these operating systems. These aren't your grandma's DOS-based Windows operating systems. Turning off (most) services is a seriously dumb thing to do. It doesn't gain you so much as 1% total in performance, and it stands every chance of crippling system functionality. /end rant
- Collin