Windows Vista is "ehhh"... broke down and started running it a couple of months back. It is visually more appealing than Window XP if you have the right hardware. And while I am not sold 100% on Vista, I will not go back to XP... The reason.... I have the RC of Windows 7 and I like it much more than Vista and XP. This will probably be the first release day OS I purchased since Windows 2000.
I would suggest Ubuntu
Linux for your older computer, but, no offense Lenny, you seem a little green around computers; Linux is probably not for you... but you may want to download a live CD and boot from it and see. I know you are not sold on Audacity, but there is a Linux version and it is packaged with Ubuntu. You can check out NewEgg.com
to see if you can get an OEM version of Windows XP for a more affordable price since you don't have your installation CD. I agree with Ian... time for a fresh install of the OS with all the nagging issues you are having... just don't forget to backup your data.