I'm not really a fan of IE8. It does tend to freeze up when you have too many windows open, and after a while, that's just not something I want to deal with.
You could and should switch to FireFox.
The main reason being that FireFox is inherently more secure then IE since it isn't tied into the OS as intimately as IE is. There have been thousands of exploits over the years for IE, some of which have been executed by simply visiting a website and while FireFox isn't immune to security flaws, they are not as common and definitly get patches out much quicker. (Microsoft follows a patch schedule, so if a security flaw is found in IE on a Wednesday, they will not release a patch until the following Tuesday.)
With regards to Windows 7, it's pretty much everything Vista should have been. I've been using XP since it was a beta many years ago, tried Vista for about a month and realized it was utter pure garbage and removed it - swore I would never leave XP again! However, I gave Windows 7 a shot the other week and so far I'm extremely impressed. There are noticeable speed improvements, an intuitive user interface and all the minor quirks I hated about Vista are gone or can be easily removed.
Windows 7 does have good compatibility with Windows XP programs, I haven't found anything that wouldn't run. There is also a compatibility option, so you can run programs as if you were running XP. Another good feature about Windows 7 is that it has excellent tablet support, vastly improved over Vista, improved handwriting recognition and what not. Windows 7 also makes connecting to network devices much more user friendly than Vista, so I would be surprised if you had difficulty connecting to your network printer.
Just a word of caution though, you will likely have to do a clean install of Windows 7, meaning you will lose all data on your hard drive. If that isn't an option, connect an external hard drive and copy everything over then proceed with the installation. I think Windows 7 is worth the upgrade over XP and definitely without a doubt, not as aggravating and useless as Vista has been to so many people.