Both. I have my gaming computer as a Vista machine, which I will upgrade to SP1 as soon as it comes out, and one XP machine which I will upgrade to SP3. On the topic of compatibility on Vista, I don't get why there are all these complaints when I've had Vista for months and have been able to use all of my software, even dating back to Windows 95 without any problems at all. And yes, you read correctly, software dating back to Windows 95 (which are games).