Buy an RJ45 crossover cable for less than 5$, connect the laptops and you are all set. If your laptops are equipped with modern gigabit network cards a straight-through ethernet cable should work as well.
No.
You may be able to establish an Ad-Hoc connection between the Vista Desktop and XP laptop. I've never tried it, therefore google is your best friend. Search "Connect desktop to internet via Laptop)
Assuming it meets the system requirements, yes.
Yes, it should work
I have MGI Photo Program on dicks, I had it on Windows XP. I Tried to install on my laptop, It has Windows Vista. Why won't it install on Vista
No. Obviously, if you upgrade to Windows Vista, you will have Windows Vista.
If you have a Windows Vista operating system right now, then I would recommend you switching to Windows XP. Vista has had numerous problems. Be sure to get service pack 2 if you purchase an older system.
windows Xp is better but Vista is slightly faster
Drivers written for Windows Vista are not backwards-compatible with Windows XP. Most hardware that has a driver for Vista should also have a driver for Windows XP.
This depends on how you want to "connect" them. If you install and configure Samba on the laptop, it can share files with Windows. If you are not interested in sharing files, but just want to control the laptop from within Windows, install an SSH server on the laptop, and connect to it from Windows using puTTY.
You can, but I would recommend using windows 7 rather than XP since some of the hardware may be incompatible with XP. Plus Windows 7 is pretty slick and fast, with much fewer problems than vista.
They are "compatible" in the sense that many applications that run on Windows XP will run on Windows Vista.