I'm running an old Inspiron 1100 with 2 GB of ram to type this message, so I'm pretty sure that max ram of 512 mb isn't right. I've seen them with 250 GB hard drives, as well. They're quite capable of running Windows 7, specs wise.
I'm seriously thinking about putting 7 on this one if I can find drivers that work. They're old, they're ugly, but they're VERY durable. This 10 year old laptop is still running, while both of the HP DV6's I bought about a year or so ago are kaput. Screen quit lighting up on one and the hard drive and video both quit working on the other. This one is old and slow, but at least I can depend on it not conking out just when I need it, and losing all my programs and pictures and stuff.