which version of windows 7 should be installed on 512 mb ram

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YOu can install windows 7 with 512 mb ram but m8 dont do it , even netbooks with 1 gb ram and windows 7 starter are slow as hell despite the slow hdd . So i recommend getting windows xp or an linux version with low ram consumption.
 
If you are going to use Windows 7 with 512MB RAM, choose a 32-bit version.
Choosing Home Premium, Professional or Ultra won't affect memory usage, but Home Premium probably has everything you need.
You will get a lot of paging and slow performance on 512MB RAM. Windows XP will be better, but 512MB isn't great with XP either. You really need 2GB RAM with Windows for it to run well and be able to run most programs on it.
 
I'd strongly advise getting more RAM or a newer machine. However if you must then use Windows 7 Starter. It's what the netbooks use and it's slow on them as pointed out by previous posters. Again, I'd really go for an upgrade, your experience will be so unpleasant with 512mb of RAM.