Windows 7 is out of the question. All Intel CPUs from the 386 through the Pentium iV, are 32-bit only and cannot support more than 4GB of RAM, if the motherboard/chipset can even support that much. It wasn't until the late Pentium 3 (late coppermine/tualatin) and Pentium IV systems that 2GB - 3GB was possible. It's not a matter of parts, it's a matter of architectural limitations.
Outside of an SD-to-IDE or mSATA-to-IDE adapter switch the hard drive over to an SSD, there aren't any other improvements you can really do. The conversion to an SD card or mSATA drive will give it some more life and make it more responsive, but XP/Windows 2000 are your limit.