I would choose XP. I haven't had any problems on any computer I've installed on it, and since I'm an aging geek....my patience for getting hardware drivers is dwindling. There have been only a handful of software(s) that wouldn't work with XP for me....most were old and out of date anyway, and the others...mainly tied to my cd burner, for, uh, software piracy I have windows 98 on a seperate partition should I need to use those. 128mb will get you by. 256 is optimal, however, if you want to boost your windows xp performance go to
www.blkviper.com, follow his how to on disabling useless system services and freeing up memory! Oh, and get windows xp professional, it supports dual CPU's as well as lots of win2k/server stuff, just a better version.