You are quite correct in making the move from xp now, as end of life approaches it will no longer have security holes patched etc, many like yourself have a hard time with this, it has been a solid workhorse and known and understood by nearly all for years, but now is the time to take a massive step forward without question, BUT, have no doubts you are in for a learning curve with Win 7, and an even steeper curve with Win 8.1 (forget Win 8), they have different presentations than xp users are used too.
The first thing to do is check if your hardware can handle the newer OS's, check Win 7 Here, and Win 8.1 Here, a major point to consider is ram, these newer systems run much smoother with larger amounts of ram, the standard these day's is probably 4gig + of ram, although they say it can run on much less, you will appreciate the difference it can make, and to this end, you will need a 64bit OS to fully utilise 4gig or higher, and my fear is your hardware may not be able to handle a 64bit OS, so this needs careful consideration.
I fear your best option will be to buy a new system, it will be fully capable of handling the new OS and make a massive difference to your user experience, you will wonder how you managed to get by for so long without once you feel the power they have, you can of course build your own system, you can buy "pre built systems" (just motherboard, ram, CPU and heatsink) these days, where all you have to do is swap out your old motherboard (complete as is), and put in the new one, connecting the case wires will be the most technical thing you need to do, your drives will be fine to use generally speaking, but you will need to calculate the cost of the pre built board\system and the cost of the new OS, to that of a complete system.
My best advice is go for Win 8.1 (pro if you can afford it), it is far superior to the original Win 8, which I would not of touched with a barge pole lol, but make no bones about it you will be in for a major learning curve, BUT, once you actually get used to the concept of using the corners to maneuver about the different screens, it becomes a lot easier, and it is the wisest choice in upgrading, because it will last you much longer than Win 7, as that is already several (4 possibly ?) years old I believe lol, so it makes the wisest investment, but you will be in for a new experience compared to xp.
Now programs you simply need to look at what you use, and see if they have a version for the newer OS, if they do then it's all good, if not then you will need to find an alternate one, the physical files will be fine, that is as long as they are saved in a format that can be accessed by the newer program(s), so if you have a specific program, that saves in it's own specific file extension, as opposed to a generic one used by numerous software makers, if you have files with specific extensions, then there is a high probability of not being able to use\access those on the new system.
This will be a major jump for you, and all this gives you many major factors to consider, what may help you is if you can go to a store where you can get hands on and use a demo system to get a feel for the new OS's, and if an assistant can help show you around Win 8.1 then it will help you a lot in your choice, sorry to throw so much at you, but as you can see there are many things to take into account, hope this helps get you started at least.