OT - Rollout thin clients vs. workstation upgrades?

I've been asked to make recommendations as to our future upgrade path.

My options are the two following unless someone has a better suggestion.

Option 1 - Thin Client
Our workstations are quite old. Leave them as is and install a pumped up
server running Citrix and make everyone a thin client and disregard the
workstations.

Option 2 - Workstation upgrade

Rollout new workstations with Win XP and moderately equipped performance
wise based on today's standards.

I'm curious what the feedback is from other IT guys and gals. I'm not sold
on Citrix as an internal solution, we use it as an remote client solution
and it works fine. However, I can see the benefit of doing away with
individual workstation issues.

Thanks for your time and opinions.

Jim Carnes
Information Systems Administrator
jcarnes@...
Kenlee Precision Corporation
1700 Morrell Park Ave
Baltimore, MD 21230