I have a test computer that runs Windows 7 and AV + installed programs on it just fine with 512MB, on a Netbook, I would have taken the ISO file, extracted it with 7-zip, move the file to a flash drive, move the file from the flash drive to the Netbook's HDD/SSD, and open the file folder of the extracted ISO and double-click setup to install Windows 7.
Has it booted before with Windows 7?
What was the previous OS?
Are any hardware parts inside loose? (if you opened the case at any time)