first let me recommend a useful tool
5 bucks goes long way, its like a burner cellphone some people are able to use it multiple times some just once, but its a must have=] I have one and has served me well! (if you decide to go through with it)
1) 2 gb, would increase your utilization by 100% thats for sure, and one thing I believe (correct me if i am wrong someone) when memory usage is being used in excess than what it can handle then it will begin to use the hdd as a memory source (once again not sure 100%).
If this holds true and your device is running "high" then adding 1gb more would then take away memory usage from a SLOW hdd and be used on the actual RAM.
If this all holds true (I hope it does) then the device would run smoother, open more tabs, etc what memory normally does)
I am sure the apt. manager would be able to tolerate 2gb, even though 4gb is the current standard on this year.
It is what it is at this point=/ unless upgrading the atom chip..but thats a waste of money..at this point just get a tablet that functions just as good!
2) If I am correct about this, when you are on win 7 put in XP cd, it will read it and start to "downgrade" to xp, then as for a "reboot", from there it is 100% important to take away the CD/DVD/usbDVD out, and let the computer boot on win XP set up by itself (since the cd has given the harddrive an promt of bootmngr command (correct me if im wrong someone) and it will go to xp set up to begin hdd partition wipe and obvious the CD USBDVD device would be needed to install. (If i am correct the motherboard should be able to recognize the DVD-USB drive since they are from same manufactor and may have some sort of internal memory to recognize it (not sure).
but all in all it should work.
but you are right disconnect the usb when its rebooting after win7 promt restart screen occurs.
edit1: Also on a side not, I wouldnt recommend windows xp, i believe 2014 MSFT will completely end service for ALL xp users, so viruses, hacks and such are much more open to attack you device since XP is abandoned forever. Something to keep in mind. Win 7 is really the new xp standard. ..i have win8..i hate it..so buggy..Edited by istudy92 - 11/16/13 at 8:59am