XP is still a completely viable OS, and as others stated, especially for older HW and in cases where it's simply not worth the $ to invest in W7. Just be aware support ends on it in 2014 (XP SP3) - SP support on SP1 and SP2 ended in 2006.
Honestly though, even on older machines that are of the XP era, I find Windows 7 to run on said hardware just as well as XP does, but you'll occasionally hit driver availability issues. I'm having that problem atm trying to find W7/WHS 2011 RAID drivers for a 680i (Asus P5N32 E SLI Plus) based board. XP drivers are readily available, but Win 7/WHS 2011 ones aren't.
As for AF, I think it delivers a good initial, easy to use experience - many people get back into the Amiga scene via Amiga Forever, but personally I have outgrown the encrypted ROM's and instability issues with it and just headed to standalone UAE or Amithlon.
I would not buy AF again myself, but I would not hesitate to recommend it to someone that just wants an emulated blast from the past in an all in one package.