Win XP is fine for most normal folk - if geeks wish to line Microsoft's pockets every time another shiny toy is released, then fine.
No, no and no.
Windows XP is now officially EOL (end of line).
In certain circumstances it is in "Extended Support" until April 2014, but this does not apply to "Consumer, Consumer Hardware, Multimedia products or Microsoft Online Services", so for example XP Home won't be covered.
Running a version of Windows that no longer has access to security updates is a big no no if it is connected to the internet. I don't care what security software you are running.... you still need the core OS to be kept up to date.
There is nothing wrong with Windows 7, and Windows 8 isn't
that bad.