It will be be both DX9 and DX10 compatible. If you want all the bells and whistles and the eye candy then DX10 /Vista although there may be a DX10 update for XP I’m sure is will be a cut down version sorta DX9+ variety. I would be suprised if they went down this route as it’s in their interest to push poeple down the Vista path.
Vista has it’s problems but then it’s a Microsoft OS so you already knew there would be issues with drivers and support for some hardware types. Rumours are the beta version of SP1 with be released on W/C 16th July with the full release by the end of the year around the same time they release Server 2008.