So, good questions.
As for mb and MBP, yes I would say graphics card is the key differance, some people like the steel case not the plastic one. The "expansion" slot is a new funky way to say PCMCIA slot, although on the MBP it is an EXPRESSCARD slot, for which there is NOT a great deal to stick in it yet. EVDO high speed cards and such are a bit slow to materialize. The MACBOOK has neither, but I haven't found it an issue yet. I am working with a company for a usb to pcmcia alternative. More later.

512 is OKAY, but I would not run one of the new intel macs without 1gb. For the 40-50 it will cost to upgrade, it makes life just so much easier.

As for performance comparing the two, I think the MB is perfectly fine. For most things, it meets or beats the mbp.

Putting XP on works fine, and for the most part I would say it is FASTER than my ibm and dell laptops. There is no performance hit at all, at least not with bootcamp. I would even say it is FASTER at some tasks. Of course, no graphics card will slow down things like gaming and rendering. If you are going to do ANY gaming, get the MBP. If you are fine with the MACBOOK and are not gaming, get the MACBOOK, put some $$ into RAM and maybe get a larger harddrive. For bootcamp, you will need to make a second partition for the Windows OS. that will take up I would recommend a minimum or 10 but better 15 GB.