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Technically a Pavilion 23 is able to run the Windows 7 operating system, but HP does not provide Windows 7 drivers for that machine so it's possible that some of your hardware would not work correctly. So for that reason, I would not advise actually installing Windows 7 on one of those computers. Drivers are essential for proper operation.
If you have any other questions on this, just let me know and I'll be happy to help you out.
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It's impossible to know exactly what hardware might not work correctly. Since HP does not supply any Windows 7 drivers for the machine, Windows 7 itself would try to locate a driver that would work. Barring that, the hardware would simply not function correctly. It could be the video, the sound, the network card, etc.
Regarding the latest model, if you run a Google search on "HP Windows 7" then you will find several HP computers that you can purchase that are already running Windows 7.
The problem with getting a top of the line current model with Windows 7 drivers is that Win 7 is now two generations behind the current OS. Companies are slowly starting to move away from it in terms of support.
Let me know what other questions you have.