to confirm what you already know, pro tools free is not runable on xp, which is highly annoying. i tried running forcing it to run as a 98 program or something (it was over a year ago i did it so i forget the details) but i couldnt make it happen. (the problem is caused by the fact they made pro tools free before XP came about, and have never updated it)
greg recommends kristal, i tried it briefly and although it was very basic, i liked it. one problem it had is you do need to read the help file to understand certain functions (like how to select a region to bounce) but the help file seems thorough enough.
at the level you'll most likely be at (starting out) going higher than 16 bit is unecessary (which i think was johnnies point) and it will just cos a slight bit of hassle in having to be aware of how you bounce files and compatibilty with other software.