Vista SP1, which just got RTM, was supposed to be Vista's savior -ridding us of all this sluggishness and annoyances- was a big disappointment for me. I haven't noticed any performance improvement at all and my wireless got broken.
Thanks to VMWare's greatness, you can use Linux (I'm a big fan of Kubuntu) as a main environment and use XP in a VM for those remaining few task you cannot do in Linux.
As far as media watching, I reckon that Vista's Media Center is the best looking, but there are excellent alternatives: I'm quite happy with my Mac mini with Front Row and the PS3's media center capabilities are getting better and better, especially with PlayTV coming this spring. »