It has been suggested that Vista requires at least 2GB of RAM for it to run moderately well, so having 4 is probably sufficient. The other thing is that you only have two cores which will limit things a bit. I would stick with XP because you don't have to pay any extra and it will run smoother.
I was using VMWare, did the job nicely (so long as you don't want it for games) but Vista was painfully slow on my MBP with 2GB RAM.
You have probably seen ads selling computers with XP as if the old version is a selling point

.
If you just want to launch the odd app, there is always CrossOver though it doesn't run everything at least you don't have to run two OSs at the same time.