Windows 7 is quite simply faster, more stable, boots faster, goes to sleep faster, comes back from sleep faster, manages your files better and on top of that it's beautiful to look at and easy to use. Even the preproduction version of Windows 7 was better than my Vista with SP2. XP is a good operating system and if you don't need to add new hardware or software, XP is good. However, XP is old as an operating system. Also chances are that if you're running XP, you might not meet the minimum requirements for Windows 7 - check the compatibility site at Microsoft to see if your system will support Windows 7. That said, Windows 7 is light years ahead of Windows XP in terms of functionality, ease of use, etc - to me it's worth buying a new system.
Installation was very straight forward. You put in the CD and reboot your machine. You might have to enter your bios and enable the "boot from CD" option. Once the machine reboots a nice screen comes up to guide you through the installation. You have the option to upgrade your PC or do a clean installation. I did an upgrade and it brought in all of my files and settings from my windows Vista system. It worked great.
The upgrade did take about 2 hours for me so definitely consider.
I noticed that early on in the installation the operating system went out to Microsoft's site to look for the latest and greatest updates, so I think this should help Microsoft respond quickly to any hiccups with compatibility.
-faster boot time
-faster go to sleep
-faster about 20% to 30% faster at running applications than my Vista - seriously (but those are my results without any benchmarks or anything like that, just seeing how fast Adobe Illustrator loads, and how fast all the applications respond)
-joining wireless networks is much easier
-the interface is just plain beautiful
-my wallpapers are now a slideshow that can be set to change every few minutes (I'm not stuck with the same picture)
-Gadgets - these are wonderful little small applications that you can drag onto your desktop. I have a weather gadget and a calendar gadget on my desktop that tell me
-Better taskbar management - hovering over the taskbar icons shows me mini windows of what's running
-Better file management - I can organize my files into Libraries that are sortable not only by type but by folder or other data. It's great! I can browse through my presentations or illustrator files!
-Windows Media appears to be smoother which I love.
-You get some virus protection and firewall with Windows 7 but consider something more comprehensive like McAfee Total Protection 3User 2010.
If you want to run Windows 7 on your PC, here's what it takes:
1 gigahertz (GHz) or faster 32-bit (x86) or 64-bit (x64) processor
1 gigabyte (GB) RAM (32-bit) or 2 GB RAM (64-bit)
16 GB available hard disk space (32-bit) or 20 GB (64-bit)
DirectX 9 graphics device with WDDM 1.0 or higher driver
Additional requirements to use certain features:
Internet access (fees may apply)
Depending on resolution, video playback may require additional memory and advanced graphics hardware
For some Windows Media Center functionality a TV tuner and additional hardware may be required
Windows Touch and Tablet PCs require specific hardware
HomeGroup requires a network and PCs running Windows 7
DVD/CD authoring requires a compatible optical drive
BitLocker requires TPM 1.2
BitLocker To Go requires a USB flash drive
Windows XP Mode requires an additional 1 GB of RAM, an additional 15 GB of available hard disk space, and a processor capable of hardware virtualization with Intel VT or AMD-V turned on
Music and sound require audio output
Note: Product functionality and graphics may vary based on your system configuration. Some features may require advanced or additional hardware.