You want a bigger HDD and about 2 GB of RAM minimum, I would recommend 4 GB...win 7 is quite a bit more OS than Vista or XP and so it stores a lot more OS on your HDD and loads a lot more things into your RAM to run the OS.
Its old, single core, and slow. Just use it the way it is and do not invest any money into it. no matter what you do to it its just not powerful enough for todays needs. It will struggle even with facebook.