It is very unlikely.
yes
You can continue with the upgrade. However, you will not have the modem available to the system after the upgrade. You can see if the hardware manufacturer has produced drivers for the modem for windows XP. The HCL (Hardware Compatibility List) isn't always up to date. If you cannot find any drivers your only real option is to buy a new modem if you want to use XP.
They are different things, if you have not yet purchased an upgrade disk you should invest in an install disk. Otherwise you will have to upgrade from Vista to windows 7 every time you want to reinstall.
Windows 8 is not free since the upgrade is for new computers. If you want to upgrade you will need to pay the full price.
Yes and it is very easy through windows anytime upgrade which is available in the start menu (outside a folder). First buy Windows 7 ultimate edition then enter the product key for it and you should know how to complete the process without difficulties!
No don't stay with xp or get Windows 7 unless you want to have your computer crash non-stop
If you upgrade the system through the windows 7 installation menu, it's supposed to keep everything. If you do a fresh install, all your data on the system disk will be lost.
The operating system itself is the same. The only thing is that you need to have some other Microsoft OS already installed on your computer if you want to use upgrade option.
Yes, IE 5.0 will work on Windows Xp. You might want to upgrade to IE 7.0 or 6.0.
No file is necessary from Matrox in order to upgrade from Windows 98 to Windows XP. If you have a video card made by Matrox, you may want to check their website for driver updates. This can be done after the install, and is not mandatory.
It Depends What You Want To Upgrade, If you wanted to upgrade from say windows vista to windows 7 then YES you would need a disk, however if you were downloading the software to upgrade then you could put it onto a USB flash drive and install that way, some OS Like LINUX provide a installer which you can download from their website
i don't see why you would want to. but if your desparte the windows anytime upgrade tool should have an option to downgrade