Funny you should ask that...
This weekend I built the cheapest PC box I've ever had... took apart an old one (Duron 1200, 256Mb, 80Gb) and added a cheap mATX motherboard with onboard graphics (ASUS), a Sempron LE-1300 and 1Gb RAM. Total cost, ?77 ($115?).
Then added a clean install of Windows 7 (RC1). During set up, I ignored it, and it chose to install "Ultimate" It's running absolutely fine with no issues, including Aero. Windows 7 looks good to me, not a huge change from Vista to look at, but seems more efficient. The Windows rating system only gives me a 3.0 overall, but it's mostly falling down on graphics performance. I'm sure that with your 4Gb RAM and a decent graphics card it would be a lot better.
I'm not going to be playing any games, this PC is for office functions, websurfing and a print-server. It'll do everything I want it to.
Today I spent another ?45 pre-ordering Windows 7 Home Premium ... to make sure it keeps doing it.