In fact you can use Dreamscene in Xp with this program: http://xpscene.softonic.com/
Don't know. I prefer Windows 7, but I like to leave some Pc or laptop with Xp, and with 32bit you won't be getting much more.
You can have an idea about how is to have a video as wallpaper in Xp selecting demonhellraiser's gif image too (well, it has't much quality, it looks like a Tv in b/w) http://i.imgur.com/26yHH.gif
. This is an example of things that are better in Xp. You can use a gif as wallpaper, and in Windows 7 you can't, or you can put the music you like at the beginning and in Windows 7 is very very difficult. You can use this gif in Xp too:
If you decide to use the video he did as wallpaper he has to post it, as it isn't mine.
Edit: You can have a nice screensaver too: http://www.kephyr.com/c64screensaver/index.phtml
Edit: Enclosed is some sound from the movie WarGames (1983). You can use this as sound to play while openning Windows. This isn't a rar file, change it to wav (it's just I coudn't upload a wav file):