I can't comment on how stable XP is since I have not used it. My experience with 95, 98, NT, and 2000 has been as I stated. XP may very well be an improvement.
You say that memory leaks are the applications' (not OS') fault because they fail to free up memory correctly. This should only be true as long as the application is actually running. The operating system should always be in control of ALL resources, including memory. Whether or not an application explicitly "frees" memory it acquired from the OS, the OS should recover ALL of it when the application exits. If it does not, it's not much of an operating system by modern standards, and the system as a whole will not run efficiently for very long if applications are starting and exiting on a regular basis (as might be typical for a personal computer). With that in mind, any memory leaks in an application can be "cleaned up" simply by exiting the application. If there are any memory leaks in the OS itself, those generally would require a reboot to clean up.
I believe even Windows tries to do this level of resource management though I don't know how efficiently they do it. The fact that I had to reboot so often (in past versions of Windows) to clear certain things up and to improve performance caused me to have serious doubts about how well Windows manages resources, and how relatively free of OS leaks it was since quitting all applications often did not seem to help.