Remember SQL Express has a limitation of a single proc and 1GB of RAM (for the Buffer Pool), so can it be installed on a machine with more than those limits and what happens if it does install?

In short, yes it will install just fine and once its installed it will respect the limits that are defined for the SKU no matter whats installed on the box, ie it will only use a single proc and the buffer pool will only use 1GB of RAM.

However think about this, I see lots of folk specing machines with these limits for boxes to run Express in production, but these are Express limits, the OS still needs CPU power and memory, in fact in the case of memory Express as a whole will use more than 1GB as the limit is only for the buffer pool and while most of SQL Server's memory is allocated from the BP its not all from there.

Hence I would recomend 1.5GB and 2 procs for a smokin Express box, of course it will run on much less than that as well, thats the joy of Express!