Windows 7 32Bit will run on 1gb of ram. 64bit will need 2 for minimum performance. But ram being so cheap, it is a good idea to install more.
It does not, to my knowledge, automatically create a backup partition. It will, quite soon after installation, create a backup file in a folder which, by default, it calls "recovery" -Perhaps that is what you are meaning? If you install, without removing the Vista installation first, it will save the whole thing in a folder called win.old. This can be used as a reminder of anything you had previously, needed, but overlooked. Up to a certain extent, some of this can be transferred to your new OS. (Private files..etc..) But, if you browse this site, or google, it does seem that installing over a previous (Vista) installation, can cause instability. I have not personally experienced it.
There is a comprehensive install tutorial on this site, if you feel the need.
Install tutorial for Windows 7