Bootcamp allows you to boot your computer into either Windows or OS X. While you're booted into Windows, your computer will function just like every other Windows machine. When you're done, restart you're computer and boot back into OS X. This is the fastest option for running Windows, because you're doing it natively, but also slightly inconvenient as you have to restart each time. It's the only real option if you're into gaming in a Windows environment, though, but that doesn't seem to be your issue. The other major benefit is that it's free.
Parallels and VMWare Fusion allow you to run Windows as a virtual machine inside your OS X environment--that is, Windows will run in a window in OS X like any other program, and you can minimize or hide it whenever you want and use other OS X programs at the same time. This is more convenient since you don't have to restart, but also requires a little more RAM and costs money to buy Parallels or Fusion. If you don't want to play games, this is a great option if you want the most convenient use of Windows, where you can just turn it on inside OS X and use whatever programs you need, then suspend your Windows session and quit the virtual machine. Both programs can also run off of your Bootcamp partition if you want to be able to boot into Windows natively sometime. For Windows to work smoothly in Fusion or Parallels, you'll probably want at least 2GB RAM. I don't think 1GB would really be enough. 2GB should suffice, but 3 or 4 GB would really fly and is probably preferable if you mean to use Vista.
In all three instances, you will need a copy of Windows to install it. Legally, you probably need to buy a new one, otherwise you won't be able to "activate" Windows. Slightly less legally, you can uninstall Windows from your old computer and install it on your Mac, then choose the "activate by phone" option when asked to activate Windows, and tell the Microsoft representative that you changed the hard drive/motherboard/RAM on your old machine and needed to reinstall, but Windows no longer recognizes it; they'll give you a new activation code to use. Illegally, you can find "cracks" that will let you activate your copy of Windows no matter what, but we don't discuss that kind of thing here. If you don't mind breaking the law, Google it.
As for Parallels vs. Fusion...they both have free trials (albeit sizeable downloads) so you can download both and try them out. Lots of people seem to prefer Fusion for its stability, speediness, and for VMWare's long history in the virtual machine business, but there are also those who like Parallels better, think it's faster, and has better features. Personally, I'm running XP through Fusion on 2GB RAM and it works just fine. It uses almost all of my RAM when I have that and several other programs open, but after a couple minutes there's no slow down at all. I prefer Fusion.
