-> My first recommendation is to reinstall Vista, assuming you have the DVD available, and then attempt the upgrade again. The sluggishness is not typical of Windows 7 and is typically caused by incompatible/malfunctioning software or drivers. Upgrading from a clean installation of Vista should prevent such issues from recurring.

-> You cannot upgrade directly from XP to Windows 7; Despite XP users being eligible for the upgrade, it requires a clean (custom) installation.

-> The XP installation issue is likely caused by having a SATA, which early releases of XP have problems with. Check your system BIOS settings to see if there is a PATA/SATA compatibility setting or see if you have a newer copy of XP (preferably with SP2/SP3) available.

Hope this helps,
John