depends what you're doing with it. I'd check the hard drive first, for sure. I use acronis drive monitor to check the SMART data but you could also use the built-in diagnostics, if the laptop has em.
Other than that, the processor and (assuming no upgrade) 1 gb of ram are pretty paltry for running windows 7, any reason you're upgrading in the first place? If you're worried about the XP out-of-support issue, I'd just get a whole new PC (Even a 300 dollar dell saturday night special will outperform this if you upgrade it.) and keep this one around offline to do whatever you would otherwise in winxp mode (which I have had less than stellar experiences with.)
My two cents, other than that you should be fine.