$120 for Windows 7 is pretty fair. It’s a one time expense, and its not outrageous compared to a new version of OS X (other than Snow Leopard, which was a very cheap upgrade)
Windows 7 is likely to be more secure, and more “self maintaining” compared to XP - as a Mac user you’re probably not that interested in having to maintain the Windows side of your machine as meticulously as you would your main OS, so I would go with 7.
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-Scott
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