The 9800GT is remarkably similar to the 8800GT, which had enough horsepower for me to comfortably play Hellgate London of all things at very high settings in DX10, which leads me to believe that any upcoming game which at least had someone pretend to optimize it will run just fine. My point with Vista, though, was more: Reinstalling an operating system after you've got all your shit moved in and your ass-groove is firmly in the couch is one of the most pain-in-the-ass things you can do involving computers, so why not just shoot for Vista 64 now, ESPECIALLY if you were considering XP 64 and playing games on it.
With hilarious regards to the X-box, why the flying fuck would you buy or use a previously existing X-box if you had anything resembling a modern PC? Even keeping the settings down you'll still outperform one, you won't have the near-100% RROD rate, the controls are better, and all this at a slight delay in product release.
Do really suggest getting a new hard drive(s) instead of reusing old ones, especially since you're keeping legacy DVD drives. The performance increase of having everything on SATA is noticable and these days, inexpensive.