Well, there's run, and then there's run well. Your system will run Win7, but I wouldn't say that you'd be all that pleased with the performance.
Adding an extra 1GB of RAM would make the experience quite a bit more enjoyable, but don't expect miracles.
Truth be told, your system is fine for XP, but Vista and 7 are written more with dual/quad core CPUs in mind. Win7 will run, but you might find it getting a bit bogged down from time to time with only a single core.
So, recapping a bit... There's run, and then there's run well. As it stands, your system will run 7, but probably not that well.
There is an all-out war going on around the people I know as to if my machine can run Windows 7. Here are the specs, according to CPU-Z
CPU:
AMD Athlon XP 3000+
1 Core
Clocks in at 2.17 GHz
1 Thread
Cache:
L1-D Cache: 64 KBytes, 2-way, 64 Byte line size
L1-l Cache: 64 KBytes, 2-way, 64 Byte line size
L2 Cache: 512 Kbytes, 16-way, 64 Byte line size
Memory:
Type: DDR
Dual Channel
Size: 1024 MB
Graphics:
nVidia 8400 GS PCI Card (and it works, so don't claim that as a reason why it won't work)
512 MB Graphics RAM
Core: 567 MHz
Shaders: 1400 MHz
Memory: 333 MHz
eMachines T3092
That's everything major. No hex, but if you need the hex, tell me.

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