I don't know what you mean by hang up. It will certainly take a while to fully open. For example, opening that document I spoke of will load up the first few pages pretty quick, but if you wanted to scroll down to page 50, it probably takes 15-20 seconds before you can get there. Once the entire document has loaded, moving around in it seems fine. But I wouldn't rule out a few second lag if you are making a big jump in pages at once. It should not crash though, if that is what you are concerned about.
How are you working with 50-80 meg pdfs in Office?
32 Ultimate? As in Windows 7-8 Ultimate or some ultimate version of office? No, I really wouldn't recommend a full fledged version of Windows 7-8 on a netbook with a gig of RAM. 8 won't even run Metro stuff without a registry 'hack' because of the poor resolution. I would stick to XP, but if you had to 'upgrade' pick Win 7 Starter or Win 7 Basic (depending on where you live) and really try to get 2 gigs of RAM. If you meant some ultimate version of Office, I don't think it matters much if any, although newer versions of Office probably eat more RAM.
As much as I like my netbook, I realize it has some pretty severe limitations. You'll want to keep in mind how much you are going to spend on any purchasing for it (OS, Software, RAM, SSD) because you can quickly approach or exceed a low end laptop like:
http://dealnews.com/Refurb-Dell-Core-2-Duo-1.6-GHz-12-Convertible-Laptop-for-285-4-s-h/674378.html
http://dealnews.com/Toshiba-Satelli...z-16-Laptop-w-Case-for-400-30-s-h/674372.html