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I've installed windows 7 32-bit installed on a P3 900Mhz with 512MB memory with a 20GB hard drive with no problems. I'm testing an older 256MB laptop this weekend. An old AMD laptop I bought back in '01.
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Also something to try, give build 7057 a shot as well. I found out the hard way with my benchmarking machine, that you can't use most of the vista 64-bit drivers. Many many problems. Anyway, the Windows 7 drivers work pretty darn well as is. COD 4 works like a champ with Windows 7, on stock drivers. May wanna try a clean install too. Wow, I'm gonna stop talking now....
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Have you disabled any services? I found that sometimes disabling a service or two will cause an ill effect on programs and the start menu. Just my two cents...
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I'm definitely going to do a clean install. As 7048 has been really good to me, I would rather get a clean feel of what the RC has to offer.