Yes there are always casualties when operating systems are updated. It's nothing to do with Vista being premature, it's simply a new operating system that old (legacy) software can't operate under. You old software needs to write things to the registry for example that Vista simply won;t allow (in the old way).. That's why software companies also release updates, to ensure their software can work under the new (operating) system.

No need to partition and install XP (which will destroy your Vista boot record in anycase - fine the other way around though, install XP 1st Vista 2nd)

http://www.talkgraphics.com/images/icons/icon3.gif You can download Microsofts free VirtualPC 2007 (google it)..
Once you have VPC installed, start it from the Vista desktop icon & install WindowsXP as a Virtual Operating system.
This will allow you to run XP from the Vista desktop and install legacy software such as you are using.

Oh yes, did I mention MS VirtualPC 2007 is free