Whether you should stick with the one with xP, that depends on what you need; I only need Windows when I want to play certain video games, but that's only my experience.
I don't think GNU is the actual operating system, it would be called "GNU/Hurd" if the GNU project kernel Hurd was used.
Any Linux distro out there should be called GNU/Linux correctly because they contain GNU software, but "Linux" is just a more convenient name...
Ubuntu is usually a good choice for beginners, it's user-friendly and has most common features.
Ubuntu has a partitioning tool (GParted), it is able to shrink the size of the windows partition and make space for Ubuntu; note that the Ubuntu partition(s) won't be accessible from Windows, but Ubuntu can access Windows partitions (FAT, NTFS). Therefore I suggest making the Ubuntu (or whatever distro) partition smaller (5 or 10 GB whould suffice).