First of all, how did you know I don't have Windows 7?
I don't know actually, because you didn't mentioned your operating system, except for BSODs. The specs you gave us are fairly into the range of Windows XP, but you could have as well Win 7 32bit installed and working.
System requirements for SE, as described in en.spaceengine.org main page now are:
CPU 2 GHz dual-core 3 GHz quad-core
RAM 2 GB 4 GB
Video 1 GB, Nvidia or AMD/ATI 2 GB, Nvidia or AMD/ATI
OpenGL 3.3 3.3
OS Windows XP Windows 7
So your 512MB graphic card it's a bit off, even on OpenGL support.
On second thought, no, I'm afraid having windows 7 installed couldn't help much.