As far as Office is concerned yes. If you try to run on Vista and Office is loaded on XP you will get a message "Operating System not configured to run this Application" A lot of programs and utilities that do not integrate will run and you can drop a shortcut onto the desktop when running Vista. I endeavoured to use My Documents in C but in the end copied them over to D . I could however edit the same document in either operating system. Having them separate in E might be OK but I have no experience of that.
Basically as my other two machines ran XP and I was happy with it I gave up on Vista as with only 1gb memory I found it slower. You certainly have nothing to loose by dual booting and you can see how it goes.