Windows 7 is very good. Cheapest way to get it is whats called OEM version  which is around for $160-$180 for professional and $120-$140 for home. BUT you have to do a fresh install no matter what was on the PC previously- and you can't move OEM versions- its stuck on the PC you install it on. Nor can you upgrade CPU or motherboard... I would recommend the 64 bit as 7 is the last windows to be available in 32 bit so may as well make the change

Vista was very very bad. Slow clunky buggy with UAC (user access control) which is like your worst nanny. A real piece of shit. I perservered until  service pack 1 which fixed nothing and regressed to XP. I support a few friends machines still and Vista gives me the most headaches. 7 is great and stable and XP always reliable.

Would I move from XP? Don't really see the point - if its not broke don't fix it. But Windows 7 is far better than XP in networks for file sharing/copying. If you swap a lot of files between machines 7 is for you

Tony