1.Ati HD 5770 has a great price/performance rate.
But if you can afford it (240€), the ATI HD 5850 is excellent.
There are unofficial drivers which allows you to use an Ati as main graphic card and the nVidia as a PhysX.
2. Try to install the last drivers from asus web.
3. w7 is much better than vista. The answer is YES.