Hmmmm, where to begin????
1-Moving to PT10 isn't much of an upgrade(and may NOT work on Win 10)
2-Moving to 11 on Windows 10 makes some sense as both are 64 bit(which can give a serious performance boost) but again,I am not sure on compatibility.
3-XP is a bad idea unless that PC will stay 100% off the internet(Win 7 is not much better), which again, seems like a non-upgrade)
4-PT10 does allow you to keep using all your old plugins(provided you have, or can find the installers now).
5-Re sound quality, I doubt you will notice any change at all, given no change in hardware(although, modern plugins HAVE gotten much better in many cases. Example, Melodyne 5 sounds better than 4, which sounded better than 3...
)
6-leaving the old setup just as it is and building a modern system makes the most sense(and recycling the firewire interface SHOULD work, with a compatible FW card and driver). That leaves the old system untouched as a backup(while you come to grips with the million changes and new features)
7-Having been onboard since PT6, I can't imagine going back to anything older than 12.4(way too many features I use every day).
8-If you are a hobbyist and only record yourself, there are other DAW options you could consider on a tight budget. Reaper is free to try and cheap to buy(and can do anything you now can do). Cakewalk By Bandcamp is totally free(used to be known as SONAR). Then there are lesser versions of CuBase and Studio One(and all of these options are very capable). If any of your old plugins are available as VST, those may work fine in any of the above DAW's
9-you may BE a dinosaur(like me), but that doesn't mean staying in the stone-age is a good thing............
Not easy choices, but its down to your needs and wants