I'd go with Win7. Some machines like it better; in my experience 7 seems to be a little happier on 2GB of RAM than Vista is. 7 will also be supported until a later date, and doesn't have some of the day-to-day annoyances that plague Vista. Disable some UI effects and desktop performance should be just fine. Lots of folks don't like putting upgrade money into something so old, but if you're set on using it, installing an SSD will make life a little nicer, particularly since you may be dipping into the swap file quite a bit with that amount of RAM.
I've got 8.1 on a desktop with similar specs to your laptop, and it seems to do okay, but I don't use it much and can't speak to how much UI tweaking is possible if it runs poorly.