Is Vista faster than XP?
With any new operating system, it is natural to ask about the performance so a comparison of Vista with XP is inevitable . Vista has several new features that are designed to make the system speedier but there are countervailing aspects that make heavier demands on the hardware and detract from performance. Also, performance is a very complicated metric and there is no single measure. The answer to whether Vista is faster than XP is probably, "It depends."' Independent tests that have been published in several places have so far indicated that Vista is slightly slower than XP. One problem with an early assessment is that there are Vista features that depend on hardware or drivers that are just becoming available. Another factor is that little current software is written to take advantage of some of Vista's capability. Results from some current tests can be seen at ExtremeTech and at Tom's Hardware.
Several new features of Vista that are aimed at improving performance are called, in Microsoft marketing-speak, SuperFetch, ReadyBoost, and ReadyDrive.
SuperFetch
SuperFetch is an improvement on the Prefetch memory management that is present in Windows XP. It keeps track of what programs you use and proactively caches key files in RAM. In addition, it keeps track of how often you use a program and other usage patterns. That enables it to establish priorities for what is kept in RAM when something has to be flushed to make room. The advantage of not having to retrieve files from the much slower swap file on a hard disk speeds up computer use. Because program files are being cached in RAM, more RAM is often better. Toms's hardware has an a nice study of the effect of SuperFetch and the advantage of having additional RAM. Note that Vista makes better use of additional RAM than XP does.
ReadyBoost
ReadyBoost is a way to take advantage of the wide-spread use of flash USB drives. If a system has less RAM than it could use, it provides for the option of supplementing resources with a flash drive. This provides a faster alternative to paging out to a hard drive swap file. The speedup that is possible from using ReadyBoost and a USB key is shown in the study at Tom's Hardware mentioned above.
ReadyBoost can use USB 2.0 flash drives, Secure Digital Cards, or CompactFlash cards. However, external card readers are not supported. MP3 players are said not to work. Also, not all devices will work since there are minimum throughput requirements, and at least 256 MB of memory must be available on the device, When you plug in a suitable external device, the window shown below will appear with the ReadyBoost option at the bottom.

If you click the "Speed up my system" option and the device is suitable, the properties dialog box shown next will open.

Some results of testing of ReadyBoost are posted at this site. The author says, " ReadyBoost does not improve performance, it only improves responsiveness. It won’t make your system or Photoshop run any faster, but it will make things faster to load and initialize to a working-state. "
ReadyDrive
ReadyDrive involves a technology that is not in much use yet. A new type of hybrid hard drive will soon be available that combines flash memory with the conventional type. It will see use in notebook computers and other mobile devices and will result in longer battery lifetimes. Samsung has just released a model of this type.
For more information
If you are interested in technical details of how many of the new features in Vista work, go straight to the horse's mouth and read Mark Russinovich's articles at Microsoft TechNet.