I'm going to throw a lot of statistics at you to address condensation on your windows. Keep in mind that these stats are based on a worst-case scenario of 0° outside and 70° inside, which sounds like it may apply to your climate but is not applicable to warmer, southern climates.
Now for some stats. If a window is clear double glazed insulating glass (doesn't matter if it's wood or vinyl), the center-of-glass roomside temperature would be about 44-45°F. (Incidentally, single pane windows with a storm window would be about the same) Adding a Low E coating to the glass bumps it up to about 52°F, and Low E insulating glass with Argon gas raises the glass temperature to 57-58°F. Not bad for 0° outside.
However, with insulating glass the edge-of-glass temperatures are much lower than center-of-glass. The type of spacer that separates the panes of glass greatly affects the edge temperature, and much could be said about the merits of different types of spacers. Naturally, condensation, and even ice, would normally occur at the edge first, since that's the cold "weak spot." Clear IG with an aluminum box spacer has an edge temp of only about 29°F. Low E glass with an aluminum spacer only raises it to about 32°. Then there are "warm edge" spacers, which are warmer and provide more condensation resistance. Stainless steel spacers are about 37° edge temp on a Low E/argon unit, and presumably (don't have exact stats on this) Superspacer and TPS would be at the top at 39-40°. Again, warm edge spacers typically range from 35-40°, but still tend to max out usually in the upper 30°s. With single glazed windows that have an exterior storm window, the edge of glass is a bit lower but not as severe a drop as insulating glass.
Now for the fun part. If you cover a Low E/Argon gas unit with some type of roomside window treatment such as a shade, blind, interior shutter, etc., the center-of-glass temperature drops from about 57° to only 36°. That's an amazing 21° drop. I don't have any exact stats on what that does to the edge temperature, but I would imagine it must drop 5-15° as well. The reason it drops is because the air in the room is no longer freely circulating against the glass. Even a couch or desk in front of a window will significantly reduce the glass temperature if the furniture is partially blocking part of the window.
Enough stats. Condensation, and worse yet, ice, can NOT occur unless two conditions are present at the same time: high humidity and cold temperatures. The cold temperatures on your windows could be due in part to missing or defective weatherstrip, poorly-fitting windows, faulty installation, or just because of cold winter weather. If you have cold weather but low humidity, condensation can not occur. Both conditions have to be there. If you're experiencing condensation on your windows, you have too much humidity given the current outside temperature with the existing glass system that is in the home (assuming that the windows are properly installed and not defective in some way). There are TWO basic solutions: raise the glass temperature or lower the humidity. That's it in a nutshell - those two things. More about those in a bit. First, I'd buy a digital hygrometer from Home Depot, Radioshack, a hardware store, etc. to measure the amount of humidity in the house (about $10-$29). You need to know that. Then I'd visit a window company's website for recommended humidity levels for various outdoor temperatures. Most window manufacturers also have brochures on condensation and recommended humidity levels. Many home humidification systems have a guide shown right on the humidistat control. Most of them will state that when it's 0 degrees outside your humidity level inside should be in the 20-25% range.
RAISE THE GLASS TEMPERATURE - There are many things that can be done to raise the glass temperature. One possibility is to raise the window shades up when it's really cold out. As mentioned before that can increase the glass temperature by an additional 21° or more, but unfortunately that leads to a lack of privacy. A compromise is to open them just slightly, maybe 4" to 8", so that warm air can circulate against the bottom of the glass (the most condensation-prone area) and partially warm the glass unit. For old existing windows, the best solution is often to replace them with modern, energy-efficient windows. If you do some day replace your windows, it would be advisable to get warm-edge spacers, Low E coatings, and gas filling in the unit to hopefully avoid condensation. Other ways to raise the glass temperature include taking out roomside casement screens during the winter, using free standing fans or ceiling fans to better circulate air against the glass, and adding another layer of glass or plastic (I hate to see that though - it shouldn't be necessary).
LOWER THE HUMIDITY - I haven't seen any previous posts on reducing humidity, but if they exist could someone please post a link to that topic? One of the best solutions for an airtight home is to have an air-to-air heat exchange ventilator installed to the furnace. It's required by code for new homes in some areas. It brings in the DRY fresh air from the outside and exhausts the stale HUMID air - giving you healthy air to breathe and lowering the humidity to the desired level. New homes are built so much more airtight than older homes, so they often need mechanical help to get air exchanges. Older homes exchanged air by being drafty. Dehumidifiers will help too, but are not as effective, since they usually can't get the humidity low enough. Great for basements though. Other ways include running exhaust fans when showering (and leave them on for a while), or simply stop bathing ;-)
In summary, condensation on windows can and will occur under the proper conditions. Even ice can form if the humidity is high enough, the temperature is low enough, and other factors are in place such as restricted airflow to the glass because of window shades. You need a humidity-measuring device to see if your humidity is too high. And ultimately somebody has to address raising the glass temperature or lowering the humidity.