Sure, you can install it, no problem. The question is why would you want to install Ultimate on it vs Home Premium? The difference between the two in cost is significant and the only difference is a few features. If you don't need the features of Ultimate, why pay for them? For instance, Ultimate allows you to install XP Mode feature but XP Mode would run terribly on a machine with an Atom processor and only 2G of RAM. Another feature would be the ability to join a domain. Most users don't need that ability. Do you?
The only reason I would install Ultimate on that machine is if I somehow got the OS for free or no cost difference between it and a less featured version of Win 7.
For the greatest majority of users, Win 7 HP is all they need.