Win7 Home has XP SP1 and SP2, but not SP3. And Vista SP2 does not work with it either. thats my personal experience with this system. go for Pro, although Ultimate often cost a bit less for some funny reason
besides occasional compatibility issues, i had no problems with it. i use ultimate 32 build.
oh - i, for some reason, wasnt able to run thief 3 on it (that could have been an old cd issue), but no other issues besides a tad more memory usage (compared to xp)
Not directly.
As long as your university or collage is with the Microsoft Academic Alliance and you are in a participating program (usually its) engineering or computer science you get a bunch of free software, including Windows 7 Pro, Vista Buisness, XP Pro 64-bit and Visual Studio.
My school has both engineering and computer science programs though.
Used to have XP for years and now have Win7 as well. It's fast and user-friendly. And I've yet to encounter major bugs or crashes. XP is ftw, of course, but W7 persuaded me.