|XP with 512MB = Win7 with 1GB = Vista with 1.25GB|
More is better, of course.
"There are 2 empty white slots at the top of the motherboard and am wondering what these are for?"
Those are PCI slots, for adding sound cards, TV tuners, etc. They are not for adding memory.
"What amount of memory would be more than enough to have a fast system for multi-tasking and how many MB should be on each of the 2 sticks before I buy"
Your system will take up to 2GB (1GB/slot) of DDR2 memory. You should definitely max out the board.
"My 2nd question is, as an alternative, would it be better to purchase an XP Pro disk and do a clean install? having said that, I much prefer working with Vista."
If you decide to install more RAM (even if it's just an additional 1GB), you should either stick with Vista SP2 or upgrade to Win7. Downgrading to a 9-year-old OS just isn't a good idea, IMO.
Super PIII | Unlocked ES Tualatin @ 1.8GHz (150x12, 1.65v), 512K L2
2GB PC2700 | 500GB | Radeon x1950Pro | Apollo Pro 266T | Win7 Pro