Maffa
Regular.
If you're looking to upgrade I would go to windows 7. 8 was primarily designed for touch screens and is very different compared to XP. Going up from XP you will probably find that additional RAM will be needed (min 4gb I think). Having kids using it will probably mean a reasonable processor is required (i5 or above) as I'm sure some amount of gaming will be needed and i3 is getting oldish. Saying that, will you need a separate graphics card?
I found myself in exactly the same place a few months ago and found that having to upgrade the processor meant I needed a new motherboard. So it equated to new board,processor & additional ram or a whole new box. Not much price difference, but I found novotech do bare bones motherboard bundles that gave me the best of both. Switching from Pentium to AMD also saves around £100 on the bundles, but they do run hotter.
I found myself in exactly the same place a few months ago and found that having to upgrade the processor meant I needed a new motherboard. So it equated to new board,processor & additional ram or a whole new box. Not much price difference, but I found novotech do bare bones motherboard bundles that gave me the best of both. Switching from Pentium to AMD also saves around £100 on the bundles, but they do run hotter.