Win7 64bit is the best case scenario for MW OS wise. Bethesda came out and said Vista was superior to XP for MW and OB performance both awhile ago before Win7 had come out, on the Bethblog if I am not mistaken. If I was less lazy I would source that for you, but I am so lazy :3 Since Vista is superior to XP and Win7 uses less resources than Vista, it stands to reason that Win7 is now the best choice.
Here are some things to keep in mind when running MW on Win7 64 bit to get the most out of your choice in OS:
-Don't install the game to /program files/, install it to a non-default location like c:/games/. This is to avoid issues with User Account Control.
-Right click Morrowind.exe, navigate to "properties" and then click on the "Compatibility" tab. Ensure that "Disable visual themes", "Disable desktop composition", "Disable display scaling on high DPI settings" and "Run this program as an administrator" are checked!
-Anyone regardless of their OS should install the game in this order: Morrowind, Tribunal, Tribunal Patch, Bloodmoon, Bloodmoon Patch.
--People have told me that the GOTY edition comes fully patched. The GOTY editions I have owned have never come fully patched, so I'm not convinced this is the case.
-After installing the game, you should install the http://www.tesnexus.com/downloads/file.php?id=19510
-Next, you should run http://timeslip.users.sourceforge.net/exeopt.html on your patched .exe. Do not use the pre made patches, they are trouble for MCP.
-To take full advantage of your 4gb of RAM and the fact that you are running a 64bit OS, you should then run http://www.ntcore.com/4gb_patch.php on MW .exe.