I've been doing this for years but I'm taking a slightly different approach. With hardware being so cheap...
First, my needs are basic. No huge files or big downloads, mostly text, gathering data and processing it.
Box 1:
Linux Mint 12 by Ethernet cable to modem and Firefox for gathering and forums. Linux Shutter, editors, and side-interests (Bender, Inkscape, Getting Things Gnome, org-mode, Freeplane, prolog), AV, Web Of Trust. No file storage except temporary/daily.
Windows 2K, not connected to the Internet. Wordperfect, Irfanview. Temporary processing and to CD/USB
Box 2:
Laptop XP email, software download, ImageBurn ViaVoice 8 Advanced. No file storage. Save to CD or USB. Occasional Live Linux CD use.
Box 3:
Windows 2K, not connected to modem or Internet. Wordperfect, Photoshop, Imageburn.
Box 4:
Windows 2K, not connected to modem or Internet. Wordperfect, Photoshop.
I removed XP from several boxes and have the licenses but prefer 2K. It serves all of my needs and I know it better.
I'm planning on simplifying further with a box/board with no hard drive for Live CD/USB Linux. I am also watching for developments in small specialized OSes like Puppy for RPi. My wife has Ubuntu on a laptop and we share email accounts on the same ISP. Her start was Pascal, mine was Fortran. We are not Luddites but we do like efficiency.
I have wiped lots of database apps, OneNote, Access, firewalls, AV and file organizing apps and keep going back to basics.