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I've heard that from alot of my military friends, and with my basic knowledge of XP, I'm really leaning towards buying the XP SP3 full version for about $60.00. I just wanted to know if the Windows 7 Ultimate had a more secure operating system, that was less susceptible to MBR Rootkits, malware, viruses, and other nasty problems.

For the extra 40 bucks, A Win7/64 Home will probably do all you want it to. And it is the 64bit (if you're box can handle it) that make Vista/Seven so superior to XP (whose 64bit version was always hinky.) But even the 32bit Seven is preferable to XP... If not for the eye-candy and superior graphics, even if only for the repairs to known exploits it is worth the upgrade. But it is 64bit that you should be shooting for - It is 64bit that allows you to access ALL of the computing power possible in modern processors, and that gives you an ability to manage enormous quantities of RAM memory (32bit systems can only handle 3g).

As far as security is concerned, I would say that Seven is a bit better than XP - Again, many known exploits in XP era subsystems has been tightened up in Vista/Seven. UAC provides a basic block to older viruses (albeit that newer viruses go right through it), and the Win7 firewall is more manageable.