Windows XP will be officially retired in June 2008. And maybe you’re the type of person that says "Well.. I like my computer the way it is and I really don’t feel like buying a new computer or changing the operating system. How long can I continue to use XP before it’s unusable?"
The answer is about 2 years (roughly).
"Unusable" defined: The point where little to no off-the-shelf hardware or software is supported by your computer’s operating system.
When any OS is retired, the computer industry doesn’t toss it aside like yesterday’s newspaper. Hundreds of thousands of people (and businesses) will continue to use it well past the retirement mark. If there’s a market for the OS, companies will continue to make both hardware and software products for it.
Taking example from the past
Microsoft ended support for Windows 98 in June 2002. This was well after Windows XP was available to the public (December 2001).
Even so, Windows 98 stuck around for a while. It took a couple of years before XP overtook ‘98 as the standard where the computer industry said "Okay, we’re not making stuff for ‘98 anymore. It’s XP now."
Taking example from the present
Windows Vista is not the #1 OS in use and won’t be for a while. It’s still XP and will continue to be for a while even after June 30, 2008.
In fact it’s probably a safe bet to say Windows Vista will never be the #1 OS due to the fact another Windows will appear in 2009 (supposedly). So if anything, the one to wait for is what comes after Vista.
To extend XP for as long as possible, use open source apps
If you’re the die-hard type that wants to squeeze every possible penny out of XP, the best way to do it is with open source applications.
Open source apps are designed from the ground up to be extendable. What this means to you is that they’re "light" and don’t require as much computing power as retail apps. So even if your computer box is old and XP is old, open source allows you to stay on top of the game even if you have a yesteryear OS and box.
Open source apps are easy to come by. You probably use a few of them already such as Firefox or OpenOffice. There are many others available.
When will the time be to throw in the towel?
Ultimately this is your decision, but you will know it’s time to ditch XP for something else when the computer industry itself won’t support it any longer.
At present this is not the case. There is still wide support for XP for both hardware and software. And even with Vista in existence the industry still champions XP. As of now there is absolutely no need to worry about obsolescence with Windows XP.
But in about 2 years it will be a legitimate concern, especially with new upcoming technologies that will become standard (like USB 3.0). If you run an OS that has no official support from the company who made it, there won’t be any native OS support developed.