Buy an external disk, back up your system, then upgrade and get back what you want later.
Win7 is great, turns your underwhelming Vista laptop into a high performance machine, but does need at least 1.5Gb RAM.
Use the opportunity to dump all the crap on your machine by doing a fresh install. The few days you spend making it all work again will be well spent.
I have done this for 6 machines to date.
Regards
Lafite