Well, if you're going to keep it on XP, you should be able to find a disk with the service packs somewhere. Installing SP2 or 3, defragging the HDD, and adding a good anti-virus/firewall combo, would be the minimum I'd recommend.

You can also easily get a copy of OpenOffice so you'll have some basic wp and spreadsheet capability, and of course install either Firefox or Chrome to get you a modern browser (I think IE 9 is the latest that will work on XP).