I have mach running on XP and Win7 machines. Given the specs of the PC in question I would install XP. For Win7 you'll need more RAM and a larger HD.
If I were buying a new PC for Mach I would plan on using Windows 7. I just set up a little touch screen Shuttle with Win7-64bit (on a dual core Atom processor) and it works great.
CAD/CAM consumes a lot of resources. I wouldn't want that installed on the same machine running Mach3. Even if you close the program, I'd worry about background processes that it may spawn and leave running.
In general it is a good idea to have a dedicated machine for a CNC control. As long as your not trying to run your CAD/CAM program at the same time as Mach there is no danger of having them both on the same machine. Problems can arise sometimes even with simple things like Adobe Acrobat Reader wanting in install dial home programs that can really screw up your CNC control PC.