Hrmmm... Just for grins and giggles I installed Win7 RC on an old (old as in "new for 2001!") HP desktop - 2.4ghz P4 (socket 478, 400 FSB), 2 x 256 MB DDR-200, 30GB HDD, ATI Radeoon 9600 (128 MB, AGP 4x), 2x PCI USB 2.0 cards (total of 9 added USB ports), and a PCI firewire card; onboard sound, networking, and anything else that I might have missed. Wireless is handled through a Belkin Wireless g USB dongle. Monitor is an ancient (1996) 21" CRT. Ended up taking this dino to work as my own personal PC there; where the purpose of the PC is for Office programs (word, excel, etc.) and Visio, with several network and hardwired printer/scanners.
Runs like a champ. Did upgrade to a 1x 1GB DDR-333 to improve Office's open/close time and web surfing ability with IE8.
So, moral is 1GB should be fine. Upgrading to 2GB should be easy enough, provided the OS can support (I know so very little about Win7 Starter) and you can find the mem access cover. Do as Pesty says and get a 4 GB thumb drive (or, if you're netbook is awesome enough, an SD card; some netbooks have 1x multi card reader and 1x SD only reader, making this the better option, imho, since you won't have a extra things poking out of the machine, and can still use the multi-reader should it be required) and dedicate it to readyboost. While the option does exist (in Win7 RC at any rate) to use more than one flash drive for readyboost, you shouldn't need more than one at 4GB ($12 at wally world for a sandisk cruzer 4GB, often on sale for $9-10) - and on both PC's I have running Win7, did not notice much of a difference past 2-2.5 GB.
To answer your question about moving icons: I don't have an answer
Czar "good luck" Mohab