Regarding MySQL and PHP versions MySQL Server version: 5.0.77 and Current PHP version: 5.1.6

Does Drupal 7 support them?
For Drupal 7 you'll need at least PHP 5.2.5. Have a look at http://drupal.org/requirements
One specific issue I had with PHP less than 5.2 was that I could not install http://drupal.org/project/drush so I had to upgrade. Probably I'd have more problems down the line if I hadn't.

The MySQL version you have is OK.