I used XP for a long time and I probably had more problems with it than Vista. But then again, I installed a lot of software and never bothered to clean it. When I got my new laptop for college, it came with Vista. So far, I've probably had the same amount of random problems as the next person. I really don't see anything better in either. One thing you have to keep in mind is that Vista is the newer OS, so newer software will likely be more compatible. Also, its superfetch feature allows the computer to 'break in,' taking your usage and tuning itself to work faster.
XP has been established as a great OS though. It is pretty solid and is smaller in total file size.
So I think it all comes down to what you like. Maybe someone with more expertise has better points to share.
As for Office 2003 on Vista, I did a quick search of "MS Office 2003 on Vista" and there are plenty of sites that show you how to install it and get it to run, such as
this one. If it doesn't work for you, at least you tried it. A good alternative if you don't want to pay for MSO2007 is
OpenOffice.org, which is free and includes entire suite of programs extremely similar to the MSO suite--and it looks a lot like MSO2003.