If I get a 64 bit OS windows 7, will games like prince of persia sands of time, warrior within, spiderman 3, two thrones etc and other games launched from 2003-2007 face problems ? because I have heard on many problems that these games dont run well on Windows 7, Also can Windows 7 XP mode be used to circumvent this ?Also I have heard Nvidia drivers pose a problem for games in win 7 so I am getting Ati will that help ?
It varies. As a person who enjoys older games, I can say in many cases it does work. Normally, all you have to do is some or all of the following:
Compatibility mode => XP SP3
Disable Desktop Composition
Run as Admin
Disable Display Scaling
Install in user folder as opposed to Program files (normally not necessary).
Video Drivers seem decently backwards compatible, though sometimes artifacts will appear.
In general though, most games you can eventually get working, it depends on how much effort you want to put into it.
For example, I spent a while debugging Morrowind to realize adaptive AA causes it to crash.
You can even get ancient DOS games (so early 90's!) to work on Vista/7 with DOSBox.
Windows 7 XP mode is not a good choice because I do not think it allows you to use real Video drivers (it has a generic one) though I have never tried to gun a game in there as I have never had a need.