Win 7 starter would be the only version of Win 7 you'll be able to run on your netbook. Win 7 starter is stripped down enough so it will work with the minimal hardware that netbooks come with. Any other version of Win 7 will be too much for the unit. Samsung should offer win7 drivers for your netbook.
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Yes, you can install it, but you have the absolute minimum amount of memory needed to run the 32bit version. This means that there will be very little memory left for running other programs. It'll probably be fine for a bit of web browsing and running other lightweight applications but I wouldn't expect much more from it.The copy of XP that comes installed on it is probably better suited to the hardware.
Looking closer, it appears that some versions are shipping with windows 7 starter and office starter, so it can't work too badly. Also, it means that all the drivers should be available.