That was the exact problem. Despite being given plenty of warning, many software developers (applications and drivers) did not adjust to the new environment in time for its release. Couple that phenomenon with weak integrated GPUs that should never have been certified for Vista, and that's that.
I've run Vista flawlessly on Athlon XPs on nForce2 chipsets and Socket 478 Pentium 4s on Intel 865 chipsets, so old hardware isn't the issue.
Windows 7 is just a stripped-down, modular Vista with a streamlined user interface; the big difference is that drivers and applications are finally up to speed.