I got this same laptop from C-USA when they were on sale for $350 a few months ago. You definitely need to put another 512Mb in it if you want to run Vista and keep your sanity.
Another good tip: Acer partitions 10Gb of the 80Gb HDD for a factory restore image instead of giving you a Vista DVD. Lame. However, they do provide software so you can burn the resto image onto CD's (it take 7 discs).
So, I did this and then installed XP on the partition that had the resto on it. Now I'm dual booting XP and Vista. Runs like a champ and since its got XP its able to run my "student versions" of software from a few years back.
I had very little trouble getting the necessary drivers from acerpanam.com so that XP will work well. The most important drivers are for the Broadcom wireless card, the GMA chip and the Synaptics touchpad.
Oh, BTW I tried upgrading this notebook by dropping in a Yonah Core Duo T2050. Too bad; mobo no likey. Apparently they built it to only accept Merom Celerons. (shrug)
EDIT: The cpu in this notebook is a Celeron M 520, which is based on the Core 2 architecture, Merom core. It is a current generation CPU, but alas, only 1 core. Still, Vista works fine and XP is downright snappy.