You can make XP look a little more up-to-date by installing the MCE default theme called Royale on XP. You don't need a 3rd party application like WindowBlinds because it is a standard theme. Once you install it you will need to set it in Display Properties->Appearance->Windows and buttons->Media Center style. I've also attached a link to the default wallpaper.
Royale ThemeEnergy Bliss Wallpaper