I am, in the process of building a gaming system for all of my GOG games that I have and want feedback on what version of Windows would be the best to use and why? I have access to copies of XP, Vista, 7, and 8 that I can use. Any suggestions would be greatly appreciated.

At this point I think Windows XP 32-bit or Windows 7 32-bit has the largest support. I'm not sure if this site has any 16-bit game that doesn't utilize DOS and therefore can't be played via DOSBOX 64-bit version of either OS should suffice.

My recommendation: Windows XP 32-bit for largest support or Windows 7 64-bit in case you don't play the very oldest and do play newer games and at the same time have access to more than 4GB RAM (that is physical RAM plus Video RAM).

i think xp performs better than other os

Why install out fo the default program files directory?

Because 7 handles program permissions a bit differently, causing some games to misbehave. Installing outside of Program Files will largely negate that for you.

Because the OS' security functions often make the game either function poorly or not at all.

I haven't had huge issues with 64-bit windows 7. Some minor tweaking here and there, but that's pretty standard with DosBox games.

It has none of those shenanigans. Any 16-bit Windows games use the DOS version instead (through DOSbox, or ScummVM in some cases) (SimCity 2000, for example), and no 16-bit Windows-only games are available (until the issue of emulating that environment can be solved) (that's the reason Journeyman Project 1 isn't here, unless I remember wrongly).

All GOGs work on 64-bit Windows versions.

Are you sure?

Anyone having issues with 64-bit like kodeen with MDK and I think I've seen some complaining about Ice Wind Dale II have issues on their end?

In that case, I highly recommend Windows 7 64-bit professional version.

Can't think of any particulary issues with my Vista 64 PC, and those I had was easily fixed and probably not even related to Vista.

I play both MDK and Icewind Dale II fine on Windows 7 x64. That doesn't exclude that the games may show issues on Win7 x64 that wouldn't appear on WinXP on the same hardware (or on Win7 x64 on different hardware and drivers).

Has anyone had any problems with games in VIsta or 7 32-bit with compatibility?

Windows XP is a good OS

How much RAM do you have available? With 32-bit you can only use 4GB and that includes your Video RAM on your GPU as well.