I'd take any flavor of Windows 7 over Windows Xp, as long as you have adequate memory (1GB minimum, 2GB would be better). While Xp is a bit more lightweight, SP2 and SP3 run like crap on a low-end system anyway. If it's going to be slow in Windows 7, it'll probably be slow in Windows Xp.
For me, moving to Windows 7 was a lot like migrating to a SSD. It was a nice change, but not a huge night-and-day performance jump at first. However, going back to a Windows Xp machine feels like I'm moving back into the stone age, much like using a system with a SSD and then working on one with a mechanical drive.