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You need at least 2GB RAM for Vista to run smoothly and at a normal pace, whereas XP runs fine on a 1GB RAM. Vista is very 'pretty' visually, and all this 'prettiness' needs a lot of RAM to keep it up. The program filing system is also all on the same window now on Vista, while XP cascades sub-folders out, and sometimes depending on what you're looking for, it'll take up the whole screen, which is annoying.
Keep XP if you already have it. As pointed out if you buy a new computer, you will have to pay extra to get XP. I took the Vista Home Professional already installed. It took about 3 weeks constant use to get used to the differences in the two systems. There are some cool features. The Logitech cordless mouse is pre-configured for Vista, and with one click I can place all windows I have open in a diagonally tiled screen and quickly scroll through them calling up the one I want. It is handy if you have different applications open, such as a browser, Word, Access etc. It's actually easier than tabs on the browser. The gadget section as a side screen is handy with all the useful gadgets out there. I have a to do box right in front of me with reminders, currency converter, clock and calendar all next to the screen. XP should stay around for some time, but at some point Uncle Bill will quit supporting it as he has all the older OS that have come and gone. If you go with Vista, there is a Windows Vista Community at http://windowshelp.microsoft.com/Windows/en-US/community/default.mspx, that I have found extremely helpful in the transition.
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What is difference between vista and xp operating system