We've learned that Atom at 1.6GHz or even at 1.33GHz runs Vista just fine. You don’t feel the difference by running Vista with enough memory on low frequency Celeron or Atom single-core CPU.

As most of Celerons are single-core you cannot really feel the difference and Atom will be a good match for fancy Vista OS.

As far as we have heard you can forget about Aero, but the system will work. Intel’s 945GC simply cannot cope with fancy Aero as the graphic integrated chipset is too old and crappy to run the fancy Aero glass. 

As Vista likes more memory, you will have to add at least 2GB memory to smoothly run applications. So, yes, you will be able to run both Windows XP and Vista and we bet that sooner or later Linux will run on Atom just fine.