I'm running it in ME and minus the fact this computer is only sporting a 300something mb or ram and a 700hz processor, and a 64mb video card, its all good

I think it is because the API calls for ME-XP were thought up by the orginal developers, or didn't change that much, haven't played online (as I am willing to bet those are where major API differences occur)
as for vista, it won't flop unfortantly

Microsoft has gone to great lenghts to ensure that it does well.. for example only Vista will support Direct X 10 and as any gamer can tell you... without direct x you are up a creek. Also they at the same time are dropping ME and 98 from the supported OS list.
and considering the way the API calls are done with this WinFS and that it is needs a x86 compatible (much like mac os) machine, the new software will probalby only be bundled with Vista, probably like the full release of IE 7 I would say that Microsoft will ensure the non beta or its upgrades will not be useable on XP, and webdesigners (who try to stay modern or are for the most part gamers who will have either no IE (on a mac) or will have the newest) won't really check to see if it breaks in IE 6 so end users will have to use the newest version of IE 7