I've seen XP run on similar x86 processors with 256 MB of RAM, and there are tools that could fit XP in 512 MB of Flash memory,
HOWEVER:
XP has not yet been compiled for the ARM architecture, and it is not likely that MS will go back to a project as old as XP to port it to a whole new architecture.
So, it could, but it won't. Not in the foreseeable future.