Hi, appropo your experience with your Vaio, I had a similar issue with a Samsung X15 (circa 2002), the internal Intel graphics chip wasn't supported by Win7 but I was able to define a slightly different Intel graphics chip to it and although it leaves an unsupported VGA driver in Device Manager, it works just fine. Depends on what graphics chip you have, of course - I found a link to mine on the web.
As far as the upgrade is concerned, the machine was much more responsive running 7 when compared to XP and I certainly wouldn't go back! I have one occasional problem that I haven't been able to solve yet. Sometimes, when shutting down, the process never completes, just sits there "Shutting Down" and flashes the disk light about every 20 seconds or so. The machine is effectively shut down because if I force it with the power button when it's in this state, the next reboot doesn't flag an unexpected shutdown. Doesn't happen very often, so I'm not too bothered about it.
I tried to install Windows 8 on this machine but failed. The DVD runs as far as the four blue square logo and just hangs. Running it under Windows 7, it got further but failed on a reboot quite late on in the process (according to the progress bar). The Windows 8 partition wouldn't boot and as a bonus, it wrecked my Windows 7 system! Naturally, before I started the process, I took a full up to date backup of the Win7 system and had it restored in 10 minutes! Thanks, Microsoft, I'll let others fix the "giant mobile phone" version!
In summary, then, yes go to Win7 but maybe keep an XP partition until you've checked everything out. Of course, XP isn't going to self destruct next year and it is pretty solid. Your choice.
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