Welcome to the DVDFab user family.
When making DVD-Video backups, Clone mode and Full Disc produce almost identical results in most cases. Full Disc does allow for a slight amount of user control. Clone makes a nearly bit-for-bit copy of the original and makes a disc image (ISO) temporary file, and thus will copy discs that do not even contain the standard VIDEO_TS/IFO/VOB file structure of DVD-Video. With Full Disc, which reads and processes the disc based on the IFO files, the content is the same (unless you change it) but the placement of any given file on the output disc will almost always be different (which usually makes no difference to a player). You can still use Customize mode with DVD-9 output media and get the benefits of real control over the output (jump to menu, jump to main movie, remove annoying PGCs, change title playback order, etc.)
Full Disc will usually make the backup in slightly less time, but the choice is up to you.
The disc burner that comes with DVDFab is the VSO burning engine. ImgBurn can also be selected as the default burner if you have it installed (or Nero). I personally use ImgBurn for, among other reasons, the precise control it allows over the layer break position when making a backup of a DVD-Video.
I will have to leave the OS questions for others to respond, still happily running XP SP3 here.