Would it be worth the money to upgrade to Windows 7?
My advice is.... if you currently have XP and it does every thing you need it to.... and you are happy with its performance... then do NOT spend the money to upgrade to 7. The performance increase from the unusable ram and 64 bit processing will not be noticeable (and it may actually perform worse due to the increased overhead of the operating system... especially with older hardware).
If you HAVE to purchase an operating system due to a new build, or from a current build with Vista.. then don't spend money on XP... go ahead and purchase Windows 7.
One more thing, if and when you DO purchase 7, don't waste money on Ultimate. Home premium has just about every option you'd ever want to use, and XP virtualization is more hype than anything. Some old legacy software might require it, but 99.9% of what you use will still work just fine with Windows 7 (if you have software that requires the use of virtualization, then you'll know plenty about this before hand. If you don't know what I'm talking about then there is a very slim chance that it would even matter for you).
I have 7 and yes I do love it, but the only reason I have it is because last December I found a "family 3 pack" of 7 Home Premium upgrades for $149 at Amazon.com. I was going to buy it for my Dad anyway as a Christmas gift, and the 3-pack was the same price as a single.
Don't waste money on an OEM or Retail over an upgrade.. it's going to wipe XP anyway and do a full install, even with an 'upgrade' disk. Even if you have no O/S installed prior, one small registry entry change will allow it to work, and even that might not be necessary. I have seen OEM versions cheaper than retail upgrades though.. so IMO just go with the cheapest option.