I've been running WIN XP RC2 for about 2 months on an old beat up 400 celeron, 256 RAM. Now, all else being equal, it boots and runs faster than 98SE or ME on the same machine. Sure, there are some upsides and downsides to the upgrade. Some CD burning programs don't work, XP comes with one, so no biggie.
Overall, I'm impressed with the speed of the OS and its stability. If your machine is running fine on the OS you have now, I wouldn't bother upgrading for a while. It's not THAT big of an upgrade.
Your CC drive might fail to boot from a CD if it is not an ATAPI CD drive, though unless your drive is a freaking dinosaur, it should be ATAPI compliant. Check your cables to the drives, both the data and power cables. I've spend weeks with $1500 of software trying to track down a problem with a $.50 cable. Very liberating experience.
If you do upgrade, go with the AMD. Faster, cheaper and 99% as stable as a pentium. MSI makes a mean AMD board, Supermicro makes my favorite pentium boards. Whichever processor vendor you choose, try to get a board that uses DDR memory. Faster than the old SDRAM stuff.