Update direct x ,search graphics card manufacturer for latest drivers and update ,download latest k lite codac pack player and instal codac for windows media player ,defrag hdd for speed up, keep playing
Not true at all. Most games do better in Windows 7 than on XP. Also you have the advantage of Direct X 11 on Windows 7 if you have a DX 11 graphics card. List your hardware and I can do a better job of telling you if 7 is a better choice for you. Also Microsoft is ending support for XP.
Also always get the latest driver from either AMD or Nvidia NOT the manufacturer.
And last what the hell does a codec pack have to do with anything? Besides VLC is better than the KLite pack.
Honestly you will not see much of an increase in gaming by upgrading to Windows 7. You will probably get a very small increase like a few frames per second. Most games do run just slightly better on 7.
Direct X 11 will actually slow you down but it looks better. It needs higher end hardware to run the better graphics it provides. That has always been the trade off in games. Better picture needs better hardware.
Your computer is at the point it is going to need a full upgrade, that is if gaming is your primary use. Windows 7 is a bit more efficient than XP but not enough so that you would see major changes in how your computer runs.
Microsoft is ending support for Windows XP in 2014. That means no more security updates or anything. Just for that reason upgrading to Windows 7 is a good idea.
If you are buying it I would go with 64bit over 32bit. With 32bit you are limited to 4GB of RAM. 64bit is also a bit more efficient in using RAM overall. If you buy a retail copy you can always install it on your new hardware when you do upgrade your computer.