i also installed windows 7 on my pentium 4 HT 531 3ghz , it had the same issues with the sound card, after installing numerous xp drivers it wasnt working so i tried Realtek HD drivers and it worked,try it out it may work for u
xp runs slower than 7 on my p4 pc
i havent tried windows 8 on the p4 pc yet since i fried the gpu years ago
does it work with the onboard gpu?
depends on your taste.i find win 7 simpler to use but one of the main reason behind it is me being a power user so not sure how much difference it would make to an average user.there are people here(average as well as power users) who are happy with win 8.