You have “only” 12 months to plan you upgrade (or better your migration) to Windows 7 or Windows 8.
On April 8th 2014 Windows XP goes end of life (after a very long period)! Note that this will impact both Windows XP SP3 and also Office 2003.
How migrate has not a single possible response: you can use VDI, but also other solutions like, for example, VMware Mirage, Liquidware solutions, Dell Quest Migration services, …