I'm using Vista Ultimate and Office 2007 Ultimate on my Mac. And, it runs flawlessly and very fast.
It is much faster than XP was on my PC. But, then my PC (while otherwise comparable) only had one processor core instead of 4.
There have been no issues to complain about, and I find that I really like Vista. As much as I would like to complain about Microsoft, I think they finally got it right with Vista. It's the best Windows I've ever seen or used, and it works without issue.
I find that complaints of the security alert box are a bit exaggerated. I see that box less than I see the box in OS X that requires me to enter my password to continue. And, it's just a simple click. No big deal.
Anyway, to me, the deciding factor when choosing Vista over XP for the Mac, was looking at which one would continue to be supported for the greatest length of time. Vista is obviously the supported environment going forward.
If you only intend to continue using software that is available now, then sure, go with XP. But, if you want to know that programs you buy for the next several years will run, then get Vista.
Of course, Vista costs a lot more than XP. But, weigh that in perspective. Which OS are you going to get the greatest useful life out of?
If you don't intend to make serious use of Windows, then it's not worth messing with anyway. But, if you intend to use it regularly and for a good number of years, then buy the one that will be around for the next several years with active support.
Of course, it helps that I took advantage of a buddy's discount to get Vista Ultimate full retail at a significant discount (as in so cheap I couldn't say no). But, even if it were full price (as it was when I first decided to buy it), I would still lean towards Vista.
If you are only going to use a few programs, and you will never need newer programs, then go the cheap route. But, if you are making an investment for future usage, then get the most current product.