Hi All,
An interesting thread.....I am sticking with XP until I have to replace any of my machines.
My plan, for what it's worth, is pretty much as Shane has outlined.
I use XP firewall and am behind my Netgear firewall too, I run my web browser in a sandbox, keep my AV and Flash Player updated. I have uninstalled Java, no need for it personally, and keep regular Disk image backups on separate internal and external drives.
I guess when my hardware eventually dies then I'll migrate to a new OS, it may well be Ubuntu.