When I'm trying old PC games, in rough order:
1. Try on my laptop, has the weakest spec of my current PCs.
2. Try on VMware- though other virtual machines would possibly work too if you're not a fan.
3. Go into my cupboard, where I've stored my old-gen PCs. Dig one out, dig out the last OS installation media I knew it worked with, install that, then install the game. Go hunting for old drivers and DX releases online and through my archives.
Hook up to modern monitor and controls. Play.
Old console/Amiga/C64 games- emulator obviously, though if I've got the console and original media (usually the case) I'll sometimes compare the results.
Sometimes it doesn't work anyway, and sometimes the game isn't as good as you remembered. That leads me to step 4:
4. Look for modern indie remake. Pay $10-$20 to author. Play that for many hours instead.
As for dealing with the upgrade cycle- there are so many games out there it hardly matters. I just pick up last-years major commercial releases from the bargain bins, and stock up on indie titles. That way I don't pay the early adopter premium for hardware or software. I just upgrade when my work needs require it, then shuffle the machines down.
It'll be a bit sad in ten years though. I know I'm not going to be able to play half the games I bought now due to activation issues, etc.