well, windows 7 and 8 are pretty much preference based, so if you like the classic feel on windows get 7, but if you wanna try the new version go with 8. however, first make sure all your drivers are windows 7/8 compatible first.
Windows 7 is the answer to any upgrade question! It takes less horsepower to run than Vista while still being a better OS. Of course if you aren't going to game on it and just want to surf and do basic stuff then Linux is perfect because it is free and very powerful. And windows 8 is fine too.
well, windows 7 does take more system ram than vista, but it isnt nearly as buggy. with my old lappy, i upgraded to 7 and loved it a lot, i suggest you that, but double check your dirvers first.