Hi SWB, and welcome to the DCT forum.
(please excuse the abbreviation, I couldn't bring myself to call anyone a "seawitch"... blue or any other color)

It's more than likely that the aging hardware and an aging operating system would both be contributing to your problems.

Optimum choice, in my opinion, would be your option #1 - buy a new cheap laptop/notebook with Win8 already installed (if finances allow).

The new machine's specs, even if somewhat low-end by today's standards, would still almost certainly be a big improvement over what you've got now.

It also makes economic sense to go that way; if your existing PC is "elderly" it is most likely nearing the end of its lifespan anyway, and anything could break at any time. Imagine if you paid for the new operating system, installed it on your old XP machine and it then broke down. You'd still be up for a new machine and chances are it would come with Window 8 pre-installed anyway.

Most things get to an age where spending money on repairs is not an economical option, including computers. You replace something one day and something else breaks a week later, and so on. In most cases, by the time you've finished, it would have much less expensive (and inconvenient) to just replace the item with a brand new one in the first place.

Anyway, that's my advice for what it's worth; in the long run I believe you'll be better off financially and much happier with a brand new machine for your brand new operating system.

Cheers... Jim

Carol, don't forget to 'save' your Favorites/Bookmarks too. And if you use a locally installed email client (rather than webmail), you should also save your contacts and account details. These can all be saved to a flash drive or external hard drive via "export" options in the existing programs but only with the old operating system up and running. Then, when you get the new machine, you can simply "import" them back.

If you need any assistance with that just holler.

Cheers... Jim