I would like to note, this is my first Instructables. Yes I realize this isn't "Linkables" as someone had said in a comment in another Instructables. I hope I have kept your wallet plump, and your computer more useful than before.
If you need help, the members at the newly created forum, RetroBytes.net/forum will be more than happy to help you.
Step 1: Productivity
You pay around $300USD for this, if you aren't a student or teacher. You get it, you use it, then you feel you should upgrade it in a few years, when you get only a few more clipart images, and small features. It sounds like a waste to do so. The cost of ownership over 10 years could exceed $1000, if you aren't a student, and if you are, and you get the Teacher's and Student's Edition, it could cost you $350 or more in 10 years. Now with that $350, you could purchase stuff more meaningful. Example, if you are a student, you can purchase several text books, school supplies perhaps? Maybe even help you save up for another class. There is this one group of people who have created a nice office suite that should do everything you need in an office suite. OpenOffice.org (Its webaddress, and name) provides a feature-filled, and light-weight office suite (You could fit this on a 256MB flash drive). The only thing it lacks is clipart, but some guys have added some things to make the OpenOffice feel, more pleasing. OpenOffice Premium (http://sourceforge.net/projects/ooop) which is completely free, contains clipart, templates, and more to help get you started.
Step 2: Web
Microsoft Internet Explorer causes many problems. Most of them not for you, but for the people who create the very websites you visit. Webmasters have to design a website that will work with Internet Explorer, and following standards. Internet Explorer does not follow the standards set on the web. These standards ensure that no matter what standards compliant browser you use, the website you visit will always look the same, and not be broken. Lets start the switch. One very feature filled browser is Mozilla Firefox . Go to getfirefox.com and snatch this popular browser. It is easy to theme, and customize. Also, fits on a thumb drive :)
Do you want to design a website, a small website. Maybe one just telling about yourself. Why should you pay in excess of $200 for a program that helps you, when you can find one for $0 that does the same job? NVU is a small application that will help you design a website. It isn't like Microsoft Frontpage, where the code created is horrible and hard to navigate, but NVU creates code that is standards compliant, and is based off of Mozilla's Composer. To get NVU, go to http://www.nvu.com/. Again, another app that can go on a thumb drive.
<Insert FTP App here>
FTP is great for uploading files to a server, but again, why pay to get a high quality FTP CLient, or FTP Server? Filezilla is another opensource FTP Client, and a FTP Server that lets you download files from a ftp server, upload files to a ftp server. With their server package, why not utilize your connection to let friends and family download files? (Not endorsing Pirating here :P) Filezilla is available at http://filezilla.sourceforge.net/.
One thing to note, haven't you seen how flexible these applications are? Many can fit on USB Thumbdrives. The same kind you find in a store for $25, so you can carry your office documents, and your office suite with you. Your browser, and all its settings, and everything.