Use 6. I had a 733mhz P3 with 128mb ram, and 6 worked fine for me (though it lagged noticably when working with high-DPI or large res images). Upgrading to 7 did seem to make things lag a bit more, so I stayed with 6. I suggest you do so as well.
Also, as
>>3 stated, Paint Shop Pro is a bit more brisk on weaker systems, but it wasn't as intuitive or powerful as Photoshop. I eventually took the slight performance hit from Photoshop in exchange for a richer, fuller program. My advice? Get both, and use PSP for simple tasks, Photoshop for getting serious.