The problem with going with XP is that it's no longer an actively updated OS so it's been left very open to attacks. With Windows 7 due out next year they're planning to stop supporting XP (which they were going to do this year but because the hardware companies were so useless about joining in with the beta for Vista and it got so much bad press over it they were forced to continue supporting it) next year which will leave a lot of desktops open to massive security attacks.

I love Vista, not had a single problem with it and loving the new Direct X10 support :) I've also not had any problem running older programmes on it, my version of Office is the 1997 one and the rest of my programmes are open source alternatives (for the most part, stupid iTunes).