The upgrade to XP is pretty painless, assuming that all of your apps are compliant. The second part of your question is far more complex: what you're really talking about is setting up a point-to-point VPN connection between two remote offices. You'll need to discuss this with your ISP, since you'll need at least one static IP address for each location, or else the inter-office communication will break/need to be reconfigured whenever your cable modem's external IP changes. (Most ISPs won't give you a static IP unless you ask for it, and it costs extra.) Assuming that you get static IPs on both ends, I would actually recommend setting up a machine running an actual server operating system in at least one location to run the Routing & Remote Access Service.
Check out the following TechTarget white paper, it'll help you plan out your connectivity and security for your remote access/VPN solution: http://searchwin2000.techtarget.com/whitepaperPage/0,293857,sid1_gci916466,00.html.
This was first published in April 2004