I've had some success with this kind of thing under XP so it isn't impossible as long as you use the on-board parallel port. I needed more than 8 output lines so I added a second parallel port as a cheap option to buying a DAQ card. What I found was that if I used a PCI plug in card I could control it bitwise under XP and Win98 but if I used a USB-parallel converter I could still do this under Win98, but XP wouldn't give me that degree of control.
A second consideration is how fast do you need to switch/monitor these lines? Depending on what else is running on my machines I was unable to achieve anything faster than about once every 70mS.
Like Buechsenschuetz I strongly recommend isolation or at the very least buffering with something like a 74HCT244.
"...and all this science I don't understand
it's just my job five days a week"
Using 6i, 7.0 & 7.1 on Win'98, 2K & XP