<hr>what is the best way to set up the new computer<hr>You're going to find nearly as many answers to this as you will computer users. <img src=/S/smile.gif border=0 alt=smile width=15 height=15> Best practices include: copy data to a backup location, twice, so that when your backup does blow up (and it will sooner or later) you have another backup handy. Test your backup copies before relying on them particularly if they include client information. Keep at least one off-site copy of the information so you aren't screwed in the event of a catastrophe.
If it were me, I would start fresh with the new computer. Install Windows XP onto it and add the applications necessary one at a time, including anti-spyware/virus/spam tools and a firewall if the Internet will be connected. Plan in advance, get all the copies of the software you will need and any relevant product/license codes so you don't have to hunt for anything when the time comes.
Hope that helps,