XP is the right choice for the moment, plus Service Pack 3 will be heading out eventually soon, I hope.
Vista is a ram hog, however, it requires 1GB of RAM, but that is a standard now days though. I have a laptop with Vista Premium on, and installed a game, it doesn't work. Again what Pacman said, it isn't compatible with many games and drives of course. Luckily Counter Strike Source runs pretty nice.
I don't like the security, because it asks much stupid question. Aero is wicked but I prefer XP interface better though.
So I'll stick with XP for a couple of years, even though if it might become discontinued
