I haven't looked into Windows 7 a whole lot yet but I believe I will convert my PC. Like you, XP is still doing everything it needs to do for me. However, after skipping Vista, I'm just craving to try a new interface. In any case, here is one thought that came to mind from your listed specs.
Not a deal breaker unless you need it but if your wife's laptop does indeed have 4GB, not 3, then hers will run the 64 bit version of Windows 7 because of her core 2 duo processor. That may or may not inspire her. Certain apps like Flash in the 64 bit browser are not working yet but I expect you could still use an old browser and this similar cure would probably suffice for any other compatibility issues. She would also be able to add more memory (assuming her MB allows for it) and actually utilize it for performance gains it because the 4GB barrier will be broken.
Either way, I wouldn't panic to load Windows 7 as you appear to be still happy with XP. In a year or two, you may need a new PC and it will undoubtedly come loaded with 7. That being said, if I got a copy for free, I'd be unable to resist loading it on something.
