It may work, but it will more than likely run slow. I wouldn't recommend doing it. If you plan on running Vista, you should definately get more memory.
If the required memory for vista is 1GB my guess would be you'll need 2GB,otherwise what are the rest of the apps you're going to install use ,my advice read articles at cnet,techrepublic,pc world etc before committing yourself,better still install vista to a 2nd partition and dual boot that way if things don't work the way you want you still have xp ready to go without having to reinstall it all,unless you have the upgrade version as that will only overwrite xp and won't be able to be a clean install