Hmmm...... Lots of interesting posts!
This is going to be a bit disjointed and maybe controversial.
We use SolidWorks, SmartTeam, CosmosWorks and a few other things with SW2003 on Win XP. We have at least 22 seats in the company - not all in the ME dept. Problems? What problems? We do not experience any of the horror stories you guys seem to have. What the heck are you people doing? True, we are usually one SP in arears, but that has been our safety policy for years - not just with SolidWorks. We initially had issues with graphics boards, but now we use the Quadro 750 and it is fine. You can't blame SW for trying to give performance improvement by using a extra feature of Open GL which is supposedy a standard and coincidentally not supported by some of the older graphics boards. Heck, you can't run Win XP on an Intel 286 either!!!! Technology marches on in the computing world and hardware is on a constant upgrade path. If you can't stand the heat you need to be out of the kitchen on that score - and that is not intended to be a rude remark - I know it makes things tough for the little guy. Heck, it's tough enough for us and we are part of a LARGE company.
Our assemblies and files are huge and also have extremely complex geometry, mates, etc. Some assemblies go to thousands of parts (and subassemblies). We use all kinds or ugly imported suface and solid bodies originating on other CAD systems. (Aircraft structures) We use multiple configurations and design tables. We use concurrent design via our PDM system. Our hardware is built in house. We seem to have all the things that are supposed to cause the problems, but no problems......
(Just to make you feel better, I do bitch sometimes. why the heck did they REMOVE the system option to defualt open design tables in a separate window and only allow you to choose when you open it?)
There are some things like changes to the relationships and mates solvers in 2003 (as there were in other rev changes). Sure we get the red spots and yellow triangles sometimes after conversion. That is to be expected and we just systematically solve them. I am not saying this lightly, as we have some complex design tools we have built on SW which do highly complex geometric design. Sure, it is frustrating to have to spend a little time after an upgrade to check it and fix it as necessary.
This is not a unique problem to SW. Anyone who thinks brand X is any better in this regard is wearing rose tinted glasses. I have been in the CAD business on all sides (including VAR) since 1979 and I can tell you this is not simple word processor stuff we are dealing with here. This is higly complex and often somewhat abstract data. If you want enhancements you are going to have teething troubles. The alternative is stagnation, then everyone complains about that! Luckily for you guys, you never had to deal with the older generations of CAD systems that cost into the millions (and did a whole lot less very slowly). They would suddenly come out with a new version that was completely different software and database format!! Of course, they would "help" you to afford to upgrade with a discount, yeah, right! Even with custom software AND HARDWARE we still had problems. Frankly I have had much better luck overall with SolidWorks than any other vendor/software I have dealt with in the last 24 years.
In the original post it mentions using SW in 1996 then jumps to SW 2003. It is not clear whether some or all of the intermediate revs. have been used. It is all not at all clear if the annual support contract is being purchased. Now if you are not on support it is not really surprising the the VAR is unwilling to do much for free. (Remember, I have been there! - why do you think I am not there now?)
If you are on support and not getting REASONABLE assistance, then you need to escalate through your SW regional manager and ON UP if need be. One typical problem (as I well know) can be that the VAR identifies the problem but the customer does not like the solution (usually based on cost). Well......? Like I said, it is rough world in the computing business, particularly for the little guy with small budgets.
I guess the bottom line is that you have to decide is, is it better the devil I know than the devil I don't? Did you buy more software than you need (or can afford)? Should you bite the bullet and back another horse? (That's going to be pretty expensive too initially). Just don't go that way and in 3 years be writing to their news group complaining and lamenting the good old days of SolidWorks because your new problems now seem terrible and you have forgotten (or maybe gained a better appreciation of) the issues you had with SW.
As you see, I am somewhat but not entirely sympathetic. As an experienced VAR, system manager and support engineering in the past, I see some familiar traits in some of the comments being made. I have been there and I am realistic about it.
I get the feeling you have already decided and are merely looking for reinforcement. Please do not look to us all for strokes and justification to make your decision. Good luck with your decision whichever way you go and I truely mean that, but it has to be your own decision.