yup, Lubuntu is rahter more light
but to run Host you need 200 mb atleast (XP or Ubuntu is considered). then Vbox needs 80mb atleast to run all its services and its network manager and other things. Then your Guest OS will need 200mb (approx) Total comes upto 480mb and you have 512mb. Seems to me a risky thing prone to crash as in Xp you will have Av program with Realtime shield taking immediate cpu cycles when Vbox will be running. If a firewall is there, its hell impossible. Rest upto you.