Thanks for the detailed post - useful.
What OS would you guys recommend on a new PC and why? Win 7, or stick with the old reliable Win XP?
Windows 7 hands down. Better everything minus some legacy hardware compatibility (which if you get professional, they give you use of an XP VM to help with that). Security is much tighter, everything pops and I've even seen it run well on single-core hardware. Don't be scared by the disastrous clusterfuck that was Vista. Anyone who worked with it saw the change with R2 of Server 2008 and then Microsoft correctly implemented it and turned it into 7 which by all accounts - is damn good.
I'm sure you can find some benchmarks where people get 10fps more on this game or that game due to some stripping down even further of XP and squeezing every bit out of their earlier hardware but if you buy good enough (not even necessarily expensive, just new) hardware out of the gate you won't even notice it.
As much of a linux fanboy as I am deep down there isn't much I can pick apart with Windows 7 (if I really want to get into semantics I'll get into the stupid file permission configuration it has, or the pointless redundancy of 'libraries' but these are all very minor gripes).