So, I haven't read the entire thread, but from the original post it really depends on what you want to do with machine. To address the extra memory you can always get a 64-bit OS (XP, Vista, Windows Server 2003+, Linux). For ease of use and general work purposes and familiarity, you might want to go with XP 64-bit.
The problem with XP is that it's really out of date. Minimal features compared to Vista and even less compared to Leopard. Plus is butt ugly