To add to what BIll2 said, going by his points:
2.) XP Mode now works on non-VT enabled processors, with an extra update, but given the processor in question, any virtualization solution would run poorly.
3.) 2 GB would run great, but 1 GB is okay for basic usage. I used some old laptops for presentations, and they had single-core Pentium Ms with 1 GB of system memory, running Windows 7 x86 Pro just fine.
4.) Chances are, most drivers will be available either during the install, or through Windows Update.
5.) Windows Upgrade Advisor 2 will tell you if you have any software that isn't compatible. Don't worry if you do, though, because you can either get updated versions, or alternative apps in most cases.