Windows 7 simply uses tons of memory when in clean boot mode.
winxp was 500mb w/ all programs and setup that I use.
And currently my win7 uses 1500mb w/ all programs ans setip as above.
Still I don't like the slowness of win7, so I turn off all bells and whistles. I have quad core, 6gb ram.
Your 1gb of ram will not stand, but I think your celeron is fine.
I think, stick w/ winxp if you cannot buy ram for a cheap price.
Or buy some ram and make it 3gb, two more 1gb stick, and use win7.