(FORTUNE Small Business) – Fade in on The Blair Windows Project: In the middle of some extremely important work, your computer is strangely unresponsive. The program you launch isn't launching. The document you print isn't printing. Finally, Windows explains what's going on here: "An exception 0C has happened at address 0x0F42B9CA." Oh. Is that all?

Once again, Windows 95 or 98 has done what it seems to do a lot: crash. What would you do for a version of Windows that doesn't do this? Would you get a new computer with a lot more memory? Would you spend a couple hundred bucks extra on the operating system itself? Upgrade some key software? This internal wrangling is effectively what Microsoft, with its release of Windows 2000, is asking you to do.

Windows 2000 is the next version of Windows NT, Microsoft's high-end operating system that serves needs that the more mainstream Windows products, such as Windows 95 and 98, can't handle. Expected to be released in mid-February, Win 2000 seems destined to become part of the standard computing repertoire of small businesses. Now is the time to evaluate whether it's right for you.

Windows 2000 Professional (as opposed to Server; see the box on page 96) looks like Win 98, but inside it operates differently. Win 2000 is much less likely to crash than Win 98, much more secure against tampering by unauthorized people, and can make better use of high-end computer equipment.

These advantages don't come for free: Win 2000 requires much more hardware power than Win 98 does. I recommend (as does Microsoft) that your computer have at least 128 megabytes of memory before you install Win 2000. A midlevel Pentium processor, 166-megahertz or faster, and a two-gigabyte hard disk should be adequate, but again, the more power the better. Almost any new computer can handle Win 2000, but there's a good chance that your existing computers won't.

Even if your computers have the horsepower to run Win 2000, you'll face software- and hardware-compatibility issues. Many software programs (such as antivirus utilities) written for previous Windows versions won't run on Win 2000 because they rely on programming techniques that conflict with Win 2000's ability to keep the system as stable as possible. Most popular utilities will develop a Win 2000 version, but switching could cost you an upgrade.

Your existing hardware peripherals, such as your printer, might not work as expected because the special software programs that control them, known as drivers, might need a Win 2000 version to run. Also, older hardware, such as Creative Labs' SoundBlaster sound cards from a few years ago, might not respond to Win 2000's new support for plug-and-play devices. These compatibility issues mean that you'll face everything from lots of frustration trying to get the products to work to having to buy new versions of what works fine today.

On top of all this, Win 2000 itself costs more: A single copy lists for $319, and an upgrade from Win 98 to Win 2000 will cost you $219, whereas the current Win 98 retails for $179, and the upgrade is $89. If you get Win 2000 pre-installed when you buy a new computer, most PC vendors are likely to pass on the added cost (which is less than retail) to you.

So far, Windows 2000 must sound like big trouble, but now that you know the sacrifices and tradeoffs you'll have to make to change, the benefits are not insignificant. First, the learning curve for Win 2000 is relatively flat. It's a much easier program to use than earlier versions of Win NT were. If you know how to use Win 98, you are most of the way to knowing how to use Win 2000.

One reason to choose Win 2000 over Win 98 is its improved stability. Everyone who uses Win 95 or 98 has experienced system crashes; such events are very rare in Win 2000. I have been using prerelease versions since last summer, and I have had exactly one crash in the past few months. Even that episode speaks well of Win 2000's stability, because I restored order easily when I rebooted the machine.

If you have your office computers networked, Win 2000 will fit right in. Many small businesses use Windows' ability to do "peer to peer" networking, in which desktop users share files and printers without having a dedicated server system. Win 2000 does this well. If you have successfully set up such a system on Win 95, 98, or NT, you should be able to understand how to do it in Win 2000. You might need the help of a good Win 2000 book, and there will be plenty available as soon as the system ships. If you've relied on a consultant in the past, you'll still need one.

One new feature for small networks, called Internet Connection Sharing (which is also available in the Win 98 Second Edition), lets you share one desktop's Internet connection with the other clients on the network. Once it's set up, if any user wants to check e-mail or surf the Web, the system with the actual connection will connect and act as a conduit for the client system across the network to the Internet. The connection can be made over a normal phone line, and Win 2000 will know to dial up if necessary.

Apart from better stability and networking, Win 2000 is also noteworthy for its greatly improved security. Most security issues are beyond the realm of small business computing, but everyone who has a computer has some concerns. The first enhanced security measure in Win 2000 is that you have to log in to the system to use it. You can give others access to files and printers on your system, but until you do so they have no access. You can also specify which users have access to which files.

Mobile users will benefit from another security measure, Win 2000's Encrypted File System. EFS lets you store files on the hard drive in a strongly encrypted form. Without EFS, if someone were to gain physical access to your computer--say, by stealing your notebook off the airport security conveyor belt--he could still read data on the hard drive by placing the information in another PC. If you were to use EFS, the thief would need your log-in password to get to the data.

So should you make the move to Win 2000? I think you need to proceed with caution because of the high costs of upgrading. Win 2000 is a better desktop operating system in almost every way than Win 98, and eventually it will make sense for you to use it. Definitely consider Win 2000 if you purchase any new computers. If you're buying a new device, such as an image scanner, check to see if that device will work with Win 2000. Are you thinking of upgrading an existing system? The upgrade process is good but not perfect. Back up all your data, and be ready for anything.

Imagine a future where Windows is known for its reliability. Believe it or not, Windows 2000 actually makes that impossible notion possible.

Larry Seltzer is a contributing author to Windows 2000: The Complete Reference (Osborne/ McGraw-Hill).