Only 1GB of ram?
Windows 2000, or one of the suggested Linux distros.
Even XP does not do all that great with only 1GB of ram. It runs, but it does not mean it will run great. By the time you put antivirus on it, possibly firewall, have a couple browser windows open etc... it just wont cut it.
If upgrading ram is an option, then I'd put 2GB+ then XP would be fine. You could try 7 but I have a feeling it would get pretty bogged down due to the processor.
If it does not have to be Windows, then Linux would make more sense.