I have an installation of Windows 7 running really well, on 512MB RAM*, without any problems at all. I must say: “I am very impressed by this operating system.”
See the task manager performance log below to see how the resources are being used. If you have an older system running on Windows XP (because Vista requires too much of the system), you may want to try Windows 7.
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*I am not using Aero and only have core programs installed.