What are you running now? 2000? First off if you have that many processes running at once, I'd recommend running a spyware check first, my favorite is
Malware Anti-Spyware and it's free. Install that and AVG Free and do checks on both. Might help you out a bit.
I do not recommend running windows 7 with a gig of RAM. I don't really recommend running winXP with only a gig of RAM. Between your 1.6 ghz proc and that amount of RAM, it will be slow. Most likely unbearably slow.
Run those checks, don't mess with your OS unless you have too.