Take into account that wow is almost 3 years old, and it is targeted at a very generic audience, therefore you don't need a uber machine like you would need to play something like crysis ;-)

However, you do need a computer that can handle multiple instances of WoW. What you have is more then enough, and 8 gigs of RAM is likely to give you more trouble then it is worth (usually a boost on memory voltage is needed).

As for the OS:

XP is certainly not as bloated as Vista
32 bit can only address 4 Gigs of memory space. When you take into account the other devices in your computer, anywhere in between 3 and 3.5 gets to be used.

So the ideal would be 64-bit XP, however, as others have said, support, specially driver support, doesn't seem to be that great. If you currently have XP 32 bit, I suggest you try with that and see how it goes. If you really want to upgrade, then 64 bit vista would be the better option (home premium is fine, ultimate is overpriced and gamers don't benefit any from the extra features).