Even though they share similar names and do similar things, Outlook and Outlook.com are actually not related at all.
Installing a recently unsupported operating system so you can use an email program that hasn’t been supported for years is something I’ll advise against. There are safer ways to go.
An XP machine can run without a network. But would it still be useful?
One of the problems with Outlook Express is difficulty in exporting data. Your best bet is to find a more recent software to help with the migration.
Compacting should be completely transparent. It makes files smaller and potentially makes access of email a little faster. There is one dramatic exception.
I’ll show you how to move from Outlook Express to Windows Live Mail on Windows 7 (the easiest moving option), step by annoying step.
Moving Outlook Express folders from one machine to another isn’t obvious. Moving Outlook Express folders involves finding them, copying them, and importing them. And then there’s the address book.