How to purchase Windows for my planned VMWare Fusion setup -- via online download, etc

Apologies for this common question, but answers online are often patchy and a few details always elude me.

-- I plan to buy VMWare Fusion for my Mac Powerbook (core 2 duo.) So I need to buy a copy of Windows. I guess I'm aiming at Windows 7 Home Premium or some such thing, but please tell me a better flavor if you are passionate about it. Or would a copy of WinXP be less of a resource hog?

-- Main Question: Is it possible to purchase the windows copy via 100% download online, with no CDs shipped to me... I live overseas and prefer that. (I suppose I would then burn an installer CD myself to feed to VMWare?) If yes, Please give any and all recommendations on online stores that would have a legit copy at a decent price...

-- If it's not possible to buy windows via 100% download only, please let me know your favorite online stores to buy the physical legit versions. The only one I have learned of that didn't seem incredibly sketchy is http://www.newegg.com/

-- Anything important to know about whether aiming for an "OEM" version would be smart, foolish, frugal, risky... Can they not be re-installed a second time if the computer crashes, or some other kind of risk?

You can buy Windows 7 online from Microsoft, and they will give you a license key and a download link. You should be able to use that installer directly in Fusion, no need to burn it to a disk.

I would recommend Windows 7 over XP - it will be supported by Microsoft and 3rd party software much longer, and has many technological advantages. You should be made aware that Windows comes in several flavours—in addition to Home Premium, Pro, Ultimate, each of those can be purchased as an Upgrade, Full, or OEM version.

OEM is typically the cheapest, but is intended to be installed once on a computer you build, and can't be reused. Technically it's not meant for VMs, but in practice you shouldn't run into issues with it. However it can only be purchased as a physical copy, not downloaded. You want to stay away from Upgrade versions, which are cheaper than Full versions, but check for an existing Windows install. Finally, Full versions are the most expensive, but if you want to live by the purest letter of the license agreement, this is what you need.

Windows 8 is also an option, and will have cheaper licensing, but won't be available until October.