You shouldn't have any problem running 32 bit apps in 64 bit.
The only software that I found that wouldn't run was Adobe Indesign CS3.
I had to upgrade it, everything else works even my old Tomb Raider games from the 90s.
If you haven't purchased anything I'd go with 64 bit Windows 7 or wait for Windows 8 next month.
On the other hand if you already have both of these, it depends on how much ram you want to run.
If it's under 3 gigs I'd go with 32 bit Windows 7, if it's more go with the 64 bit XP, though 64 bit Windows 7 would be better.
You will be able to buy Windows 7 Pro 64 bit for only $40 next month.
I realize the vast majority of 32-bit XP apps run fine in the 64-bit environment. However, I'm using some older audio and diagnostic automotive equipment that only has 32-bit drivers available. Unfortunately, these 32-bit drivers will not install properly using 64-bit Windows 7.
Would I have more compatibility with these 32-bit drivers using the 64-bit Windows 7 Pro/Ultimate "XP Virtual Mode", or using a 32-bit version of Windows 7?
What do you have installed on the computer right now?
If you aren't running more the 3 gigabytes of ram it would be simpler to just run 32 bit Windows 7.
Do you know if there are any Windows 7 specific 32 bit drivers for your software?
I suppose that it's not a sure thing that the drivers will work in Windows 7 32 bit, but I would expect them to.
I've never run across anything that would run in Windows XP that wouldn't run in Windows 7 32 bit.
If you already have Windows 7 64 Ultimate installed then I'd try the Virtual XP, I've never done this myself so my experience is limited on how all of that works.
What exactly do you have that requires 32-bit drivers? Are you absolutely sure there are no 64-bit drivers?
I hope you are not confusing 32-bit application with an applications that use 32-bit drivers for connected hardware. Windows 7 64-bit will natively run both 32-bit and 64-bit applications. The biggest problems are old 16-bit applications and hardware that does not have 64-bit drivers.
Windows 7 64-bit will require 64-bit drivers for all hardware. Windows 7 32-bit will run 16-bit applications but Windows 7 64-bit will not. Windows virtualization software know as Virtual PC & XP Mode can help with legacy issues in Windows 7 64-bit.
For the record; I wouldn't advise installing Windows 7 64-bit with the intension of using Virtual PC/XP Mode, unless there was at least 4GB of memory available. Each installed virtual machine needs its own designated memory. That would be 2GB to 3GB of memory for Windows 7 and at least another 500MB for XP Mode.