So which one should you choose

Vista

PRO's:

More secure with UAC and Windows Defender...
Provides Instant Search and Internet Explorer 7 (tabbed browser)...
All versions allows peer-to-peer networking (you'll need either "Business" or "Ultimate" to allow domain models...)
Laptop users can choose from 3 different versions to get Windows Mobility Center and Tablet PC support...

CON'S:

Still buggy! Expect problems with device compatibility, drivers and 3rd party applications at least until the release of Service Pack 1 (SP1)...
Vista is VERY resource intensive...in many cases older machines (2-3 years old) will need upgrading or replacement. In some cases a memory upgrade will work; some PC's may need to be replaced with boxes that have faster CPU's and LOTS of memory!
6 DIFFERENT VERSIONS (Home Basic, Home Premium, Business and Ultimate plus 2 Enterprise Editions) makes choosing the correct version confusing at best! Some features you may (or may not) need are MISSING in the different versions (example: AERO Interface with 3-D Flip is not available in "Home Basic") so you have to review the feature sets within each version to make sure you get the right fit!

PRO's:

Tested and extremely stable...
Supports drivers from practically every peripheral device available...
Can use Home version to build a peer-to-peer network; Pro version allows both p-t-p and domain models...
Both Home and Pro have a consistent "Look and Feel"...
Only 2 basic versions (Home or Professional)

CON'S:

Manufacturers/Distributors of desktop PC's will not be able to "pre-load" and ship PC's with XP after June 30, 2008. Mainstream support will end on or about April 14, 2009. Certainly will be retired by the end of 2010...
Security (even with Service Pack 2 and compared to Vista) is still hit-or-miss. Administrator privileges applies to the whole machine and all applications...
Generation "Y" (your younger employees) grew up on intense graphical interfaces (think IPhone) and may find XP 'clunky' and difficult to navigate in...

(See a side-by-side Feature Comparison Chart here...)

Which one should I choose?

Both are still available and include both PRO's and CON's. Review the following to determine which could possibly be the best 'fit' for your organization:

XP Home/Professional - Introduced in 2002 Windows XP provided many enhancements over Windows NT 4.0 as well as 2000 Workstation. From a 'users perspective' it provided a more seamless interface over the older operating systems; from an IT perspective it simplified network access configuration, is extremely stable and is (currently) the most widely used desktop operating system in the world today.
Vista Home/Ultimate - The most noticeable changes from XP to Vista include two key components. They are:
Interface - The AERO interface provides a new 'look and feel' to previously static icons; includes the 'Glass' look (where multiple pull down options off the Start Menu) appear as see-through...icons and related options have been revamped to ease navigation. Also includes (except in Vista Home) "3-D Flip" where (if you have multiple applications open like Excel and Word) you can visually select a single application by scrolling (or rotating back and forth) between them. Also includes the Windows Sidebar with "Gadgets"...very nice.

UAC (User Account Control) / Windows Defender - UAC Separates "User" privileges and "Application" privileges so that even if a user is the system administrator changes to the desktop (i.e. adding new programs, changing configurations, etc) it requires explicit authorization before these changes get made. Vista also includes "Windows Defender" which filters and monitors for malware and viruses that may make system changes or could cause harm. It is intended as a 'compliment' (but does NOT REPLACE) other Third-Party Anti-virus applications.