1) I'm not 100%, but that *should* be adequate to run such a simple system. According to a quick Google search...
To run FreeNAS, you will need, at a minimum, the following:
* Motherboard with x86 processor
* 128 MB RAM
* 32 MB free disk space
* Network card
* BIOS that supports bootable CD-ROMs
* Another workstation with a modern web browser and access to the network FreeNAS is on
So your system should work.
2) Running off an actual install such as off a CF Card would lower the required RAM a fair bit I believe.