Windows ME sucked, and XP was the fix to it
Windows Vista sucked, and 7 was the fix to it.
Seriously though, go with 7. I have a netbook, and I run XP on it, only because with this machine, Windows 7 doesn't play nice with Final Fantasy VII, everything else though (well, everything I need, anyway), perfectly fine. Even XBMC with the Xperience theme.