You'll get a lot more screen space, but it'll make text etc absolutely tiny. Shame they don't do a 1680x1050 panel because that'd be a nice in-between. I'd personally probably opt for the 1440x900, which then means you can pile on the AA and AF at native resolution in games and still have a very smooth experience.
Nothing but bad press from where? If you just look around on the Windows forum here, you'll see plenty of positive talk about Vista. It's a very solid OS, very nice to use, and certainly far better-suited to a brand-new gaming machine than XP is (for DX10 alone). The Vista website will show you what extras Ultimate has, but I personally don't think they're worth the extra money.
As for the rest, the CPU upgrade seems like it would be pointless, as would the TurboCache thing, considering you've got 4GB of RAM there already.
Very nice machine you'll have there though, should be blisteringly quick.