That a question I get all the time.
So how to tell.
You could replace your hard drive in your computer install Vista an test - Do not do this lots of time and end of day you may have bought Vista and you hard ware does not support vista
Buy an new computer (that will work but maybe you old printer, scanner or other software will not work)
Step 3 go online and use some free resources
You can download the Windows Vista Upgrade Advisor - The Windows Vista Upgrade Advisor will help you to determine if your Windows XP-based PC can run Windows Vista. You can also use the Upgrade Advisor to determine if your Windows Vista-based PC is ready for an upgrade to a more powerful edition of Windows Vista
Then you can go to the Windows Compatibility Center
This site will also tell you if your favorite stuff works with Windows Vista? Here's where you can find out if it already does or if you just need a software upgrade or a new driver. You'll get details on thousands of software programs and devices and benefit from users' feedback.