I personally use Windows XP because it at least ostensibly has better compatability with games. However, Microsoft definitely could have done a better job with this, as compatability mode is not even close to a full solution (case in point: Homeworld Catacylsm, which I have to run in compatability mode for NT 4.0?!?).

Windows XP is greatly overpriced on the retail level, and being the law-abiding citizen I am, I had to take all of 5 minutes to find a much cheaper copy on pricewatch. The built-in drivers are REALLY nice, except they should give you an option of updating the default drivers for certain peripherals, as the Radeon drivers = BSOD.