I'm running vista ultimate on my new box..you need Vista for DX10, and you need a 64bit OS to recognized anything over ~3.1gb of ram. My new setup is running a quad core Q6600, 4gb ram, and an 8800gtx, so 64 bit vista was pretty much my only choice. There's a few quirky things...I hate how the interface is so dumbed down, and how they moved EVERYTHING in the control panel. There's a lot more steps involved in getting to anything...for example if you wanted to get to your network properties window to set a static ip or something, you have to go through about 4-5 clicks in vista, compared to 2 in XP.
Other than that, I havent had issues with it really. You need a good system to back it up though...if you're not running at least 2gb of ram, it's gonna be sluggish. Multi core CPUs definitely help too.