Still using Home Studio 2002 and Win XP but want to upgrade- what would be my best upgrade

For the software and for the system including sound card and interface?
I am still using a Pentium 4 with an audigy break out box that has all of what I have needed including optical, RCA, phono, MIDI I/O and TRS inputs. 
My Tonelab LE has direct digital optical out and MIDI I/O which I would like an interface that supports that until I can get a USB or other pedal solution. 
I want to be able to save all my files and eventually get on a Win7 machine. 

That's kind of a multi-layer question at this point in time.
If you want to continue using your XP system, MC6(non-touch version) is the only viable option currently available.
It is limited compared to other currently available options, but as Kenny noted it should run very well on XP.
A better, but more expensive path, would be a wholesale system upgrade. On the bright side, a fairly modest system like the one I am currently using smokes my old XP P4 system. PCI has been all but eliminated, so the Audigy would most likely have to be replaced. Machines that run W7 are becoming increasingly rare as W8 has been out for some time. I'm kind of old school, so I am comfortable with W7, but W8 annoys me to no end.
Do some research. Five years ago, I would not have recommended a USB interface, but I am very pleased with the performance of the one I am now using.
Ultimately, your best upgrade path would be:
New system, W7/W8, 64 bit
New interface. Too many options here, so you will have to weigh what is important to you.
Sonar X3 Studio/Producer. Studio does everything I need with room to spare. But I have a ton of third party plug-ins. If Producer appeals to you, and you can afford it, go for it.
Good luck. You are crossing a technology threshold, and it's a new world.