Windows 7 is by far the best windows that microsoft has made. "Don't upgrade from XP" if you do it, do a "Clean Install".
Though, your specs are low. I would stay with XP, cause 7 does take little more to run than XP.
If anyone ever says 7 sucks, it is their computer. If they say it is a resource hog, they just don't know what they are talking about.
7 is proven to be more quicker, more responsive, and just overall better than XP, and Vista...
But it does really need a 2GHz or better to run smooth.
My friend has a 1.8Ghz, (Dual Core though) runs 7 great
Other friend has a 2.0GHz Single core Desktop, it runs 7 smooth also.