I experienced with the both of the aformentioned OSs. So I'll do this from my own experience not based on the internet or external sources.

Windows 7.

Pro:

-slick, fantastic design and friendly interface

-low on resources ( Way better than Vista which is a monster)

-Faster booting times than in XP(seriously)

-Incredibly high potential for tweaking(I tried this, by doing stuff like editing registries or from msconfig and much much more)

-Ultimately, a lot more better than Vista(which was a totaly disaster)

Contras:

-Though better than Vista, it still feels like a rehash(mostly)

-Some incompatibilites with certain PC components

-Unstable on some machines(from what I've heard the perecentage is 10% so it's not alarmating)

-Takes a lot of time to get rid of some annoyances and tweak it(e.g: UAC which is a pain in the ass and more)

Windows XP

Pros:

-Very user friendly interface

-Most stable Windows available

-Very, very low on resources

-Performant( I mean the way it works, the fast boot times and smooth experience all in all :) )

-Now, it's very cheap and affordable

Contras:

-Even at the time when it was released the visual appearence was very ugly

-Low potential of tweaking(compared to win 7)

-It crashes pretty often(Blue screen of death)

The winner: Windows 7

Why?

It is a step forward the future, both visually and technically. Once with the release of a service pack, windows 7 will be as avery bit as good as it should be. Overall, Win 7 is better than XP, altough the diference is pretty small.