Why would the internals stop windows 7 running
It's not the internals per se, it's the lack of driver support from Compaq / HP that's the problem.
You can certainly try installing Win 7 on a gash HDD and see if you can find driver support built in to Win 7 or by searching around for compatible drivers.
In terms of the components, I believe it's a dual-core Pentium D x64 (clock speed?) with up to 4GB RAM, so that should be OK, plus it supports SATA 7200 HDD. The weakest component is probably the graphics card (forget Aero / glass without a graphics upgrade).
Worth a go, if you've got a spare HDD, IMHO.
SD