Having just 512Mb in an XP machine is a poor effort, nevermind for W7... you should be looking at minimal memory of 1Gb in either case - and as regards W7 beating XP on a notebook in terms of speed, it's not what I've found...
XP boots faster on my netbook
(1.6Ghz Atom, 2Gb DDR2 533Mhz) and gives me an hour more battery life than W7. XP also shuts down faster than W7, although I will admit to the presence of Microsofts UPHC module.
No way I'd keep W7 on my mobile device, it's a power hog compared to XP