_should_ I install Win7?

Windows XP will not expire until 2014

This is incorrect. Main Stream Support for XP has already ended. Meaning, they, "MS" is no longer developing for Xp in any way, other than certain and critical updates. This is covered under Xp's extended support through to 2014. Which is now a paid by case support. In other words. Yes they are putting out some needed updates, but theya re not developing anything else for it. Nor is any support other than the updates they release free. It is all paid for support. Till 2014, at which time Xp will be fully retired.

Personally, if you can afford it, the system you have "strictly my opinion" should handle anything you throw at it. I am not familiar with the Emulator so i can not speak to it. The only things I would upgrade on your specs are, The Video Card, and add 2G of ram, regardless if you go with 32bit or 64bit. And yes, I know what people will say about the 1G not being seen by 32bit, blah blah blah. Part of that 1G does get used. You should not need more than 4G of ram, unless the emulator needs it for some reason,, but I do not know.

Yes, Windows 7 is worth it. As long as all your apps will run on it. Upgrading is highly recommended.

Win 7 is a nice system, but you have a good one yourself. The step to Win 7 is a good one, but not anything that would "blow you away". Probably the best option for you is save for a couple years and get that new computer with Win 7 installed. Good Luck,

You can shrink your XP partition and install the free 90 day trial Win7 Enterprise to see how it runs by comparison during those 90 days. Then you can delete it in Disk Management without effect on XP. Dual Boot Installation with Windows 7 and XP

Edit: I've reconsidered and now believe a better option if you are wanting to test Win7 outside of a volume-user environmnent is to install a retail version of your choice and extend activation up to 120 days until you decide to buy it, then you can simply insert the purchased key. With Enterprise there is no chance to activate your new install as such since it uses a Volume Licensing scheme only available to organizations.

Start watching Windows 8 to become a beta tester as many of us did for over a year with Win7, one of the best tech experiences I've had and the reason I'm here. You'll also get hooked up to deals like half-price upgrades and freebies like the party favor signature-Ultimate given out for hosting a Win7 release party. And you'll be intimately familar with the OS even before it's released - all while your trusty XP chugs away in the next partition if you want.

Ok, only certain updates will be released, Any minor security updates or enhancemets will not.

Also, it's not just about bells and whistles, Win 7 offers much better security over all. It's not just one or two things. Over all security is much much better in 7 than XP.

With that said, Anyone can wait if they really need to, we all can only do so much, but the question is, should i install Win 7? and that answer is a resounding "YES". If you do not have the money now, then save up for it.
But, the answer is YES, you should without hesitation or reservation at your earliest convenience when you have the money to do so. In other words, if you are already considering it and you will have the money at some point, then yes, do it. But, telling people to wait cause it's only bells and whistles, is not the right answer.