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For gaming and other purpose windows server 2003 is not supported so your CPU and RAM will be used more efficiently. But for small database which is less in size and transaction both the OS won't be a issue. You can use any one of them. For large database and higher transaction windows server 2003 is better.
You did not specify which of the Core 2 CPUs are in the Windows XP box.
Xeon processor specifications:
Core 2 Duo processor specifications (same speed as the Xeon):
In addition to the information provided by Sybrand regarding support, there are a couple of important differences between the two operating systems:
* Windows XP is limited to 10 simultaneous external connections. It is easy to reach that limit even when other computers are not attempting to remotely connect to the Windows XP computer. The System event log will display a message "TCP/IP has reached the security limit imposed on the number of concurrent TCP connect attempts." when the 10 connection limit is attempted to be exceeded. No such limit exists on Windows 2003.
* Memory handling algorithms are different between the two operating systems. There are memory limits in the operating systems that are independent of the amount of physical memory installed. For example, what do you do if the following message appears in the System event log: "The server was unable to allocate a work item 2 times in the last 60 seconds." On Windows 2003, the problem can be fixed by creating a MaxWorkItems entry in the Windows registry.
* The Home and Home Starter (I am not sure if that is the correct name) versions of Windows XP do not fully support Oracle Database, because those versions of the operating system do not permit user controlled/configurable local user groups, user permissions (logon as batch), nor file level permissions (file permissions/file ownership are there - they just cannot be modified through the user interface).
* Yes, there are other differences, even though the two operating systems share the same kernel. The R2 version of Windows 2003 is preferred over the original release.
Co-author of "Expert Oracle Practices: Oracle Database Administration from the Oak Table"
IT Manager/Oracle DBA
K&M Machine-Fabricating, Inc.