I’ve heard mostly great things about Windows 7, whereas Vista was largely a huge flop. I have been using XP on my computer for years and have had very few problems with it, as far as any Windows OS goes that is. Most of my computer problems have been hardware-based, not relating to XP.
If you do have the money to upgrade and don’t mind going through the laborious process of backing up, reformatting, and installing the new OS, it’s not a bad idea. However, I am a firm believer of waiting a few months after a new OS is released before purchasing it. No matter how good a particular OS is said to be, the first version will always have some kinks that will drive you crazy. It takes a few months for the first users to complain about this and the Windows developers to make an updated version (or patch) to fix those initial kinks.