I just finished updating the 5150 (same model as E510) I mentioned earlier, doubling the memory to 2gb, adding an SSD as a boot drive, upgrading the BIOS to the latest version and installing Windows 7 Professional x64. The relative, who bought the machine new back in 2006, is excited and says it's like having a new PC. It boots in seconds, pops in and out of sleep in seconds, and shuts down in seconds, and the lags that plague it when booting XP from the 7200-RPM spindle drive are gone.
All the Windows 7 drivers apart from the old PCI modem, including Sigmatel onboard audio, installed automatically.
I'm not sure why your E510 isn't working properly, but it's not a flaw inherent to the machine or Windows 7. These machines will work very, very well with Windows 7 with the right mods. FYI the 120gb Samsung 840 SSD, Silverstone bracket and cables came to $129 with tax.