Does OS really matter anymore?

When it comes time to wipe my laptop and start over, I'm going to be faced with a decision. Vista is frustrating, but getting the drivers for all my hardware should be quite simple. WinXP runs smoothly on all this power (2.0GHz Turion 64 X2 Dual-Core proc, 3GB RAM), but it took me 5-6 hours to get the hardware 99% working on it. Linux should play nice with all of my hardware, save for maybe the wireless card, but I can't get by with Linux alone because of school.

So I'm thinking I could just run Linux and use virtualization software to get XP when I need it.