Well Nexuiz 2.0 will include MUCH more textures (no music though) but all the content has been optimized for size so its only a tiny bit larger then 1.5 which does fit quite nicely on my 1GB usb stick

Yeah i guess it might be possible to make it even smaller but lowering the quality or just ripping out some stuff as you have seen with tinynex15.zip. If someone does this that fine.
There are no new tracks but new maps, gamemodes, features and other fun stuff
Well your hardware is limited so nexuiz can not do some magic trick.. You might want to see into getting a new graphic card. I got a nv6600gt for 150 euro and its very fine for Nexuiz.
The guns are still in the right hand..