Running PoE with 1GB RAM

As already mentioned by TechnoMage the first thing I would do on this type of rig is to replace Vista with XP. IF you have the hard-drive space you can go for a dual-boot setup to test instead of fully committing to XP.
I know this is not really a solution and perhaps not even possible for you but I just thought I'd mention it in case you do have an old XP disk laying around somewhere ;). I wouldn't bother installing Win7 on your machine since in my experience your hardware will have a hard time supporting it.
Aside from that I can only suggest what many others have pointed out: more RAM if possible.

I play on 1 GB ram just fine. Loading times are longer than for average folks though. Can't race normally. Team play can get annoying too.

However, it's not just ram that matters.

I don't know how people are playing on 1GB memory. The client alone takes up nearly 2GB in basic areas (town?) and can go well over 2GB in other areas.

Windows XP is a very bad idea, it's a 32-bit OS and limits PoE's address space. I was getting constant memory related crashes on XP while playing PoE (10 - 20 per hour) and having a 5400rpm WD Green HDD meant it took bloody ages to get back into the game, only to have it crash 5 minutes later. Upgrading to Windows 8 64-bit solved all the crashes. In fact, PoE was the single largest reason I upgraded my OS. I had 4GB total memory at the time.

I would say 4GB along with a 64-bit OS is the minimum requirements for PoE. Anything less will just cause you too many problems. Moreover I recommend 6+ GB because who wants to close their web browser while playing? Certainly not me. The browser typically takes between 400 - 800MB (Firefox) though this will vary based on your browser and setup (Chrome can be a huge memory hog)

Even if you get a 64-bit OS and 4GB memory, yes, your processor does suck. I have an i5 2500K (quad core 3.3Ghz with turbo) and when PoE is running, it can sometimes go well over 50% CPU usage. Your processor may run PoE but you will experience lag.

The graphics isn't as big a problem if you run on medium and play solo or in smaller parties. I used to run on Intel HD3000 on-die and yeah it did lag in some areas, but it was playable as long as I was solo (I usually solo anyway, so no skin off my knees)

TL;DR - try it, but don't get your hopes up. I would suggest to just play something else until you can upgrade.

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Ensure your windows page file is large enough (In your situation I would set it to min 4- max 8GB) and if possible locate your page file on a separate drive from where windows/POE is installed if you have more than one physical hard drive.

could you elaborate on this page file thing? im kinda confused atm

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I am surprised when people have such low RAM, especially since quality RAM is absolutely dirt cheap nowadays. I can only assume you just have a much older motherboard that can't support the higher quantities.

Motherboard has only 2 slots for RAM, even though it says 4. 2 long ones and 2 small ones(?) and im also guessing that it cant support those higher ram stuff


Sorry for the extremely late reply

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could you elaborate on this page file thing? im kinda confused atm

The pagefile is a file stored on a storage medium (hard drive, solid state drive, etc.) that acts like an extension for your RAM. If your RAM capacity is too small to hold a program (Path of Exile for example) it will "spill over" into the pagefile. The drawback is that the storage medium the pagefile is stored on is usually much slower than the RAM. This results in a program that responds much slower than normal.

Usually Windows handles the pagefile settings by default and does a reasonable job, but if you want to check out the settings yourself here is a tutorial.

I suggest lowering the resolution, texture settings, and getting rid of Vista for XP. Vista itself eats your 1 GB of RAM.