Help!

[NedLynch]

OS as in Operating System.
You have Win XP 32 bit, which means your OS can utilize up to 3gb of ram.
The recommendation is to buy win7 64 bit, which can utilize all the ram you can put on your motherboard.
And it is an exellent recommendation, win7 is lightyears better than win xp.
The only downside is it means spending money.
Here in the US you have two choices when buying a new operating system.

Retail - you get a nice boxed version of the OS and can install it on as many
computers as you like.
OEM version - very simple packaging and you can use it only on one computer at a time, of course the OEM version is something like half the price of the retail version.

If you buy win7 I would honestly buy a new hard drive as well, shouldn't be too expensive, depends of course on what you choose a bit. Put the new hard drive in your computer, take the old one out, start the computer, insert the win7 disk in your dvd drive and the rest win7 will do for you, very easy.