heads up with an aggro

Heads up NL holdem tourney, still in lowest level. After underbetting and giving me ridiculous odds, i drew out to win to nice pots for such a low level, when the folowing series takes place.
With 10-20 blinds I have 1850 in chips and he has 1150, he proceeds to raise to 120 three straight hands. Took one flop for 120 where he led out for like 550 or so (bet more than the pot, and i folded) I let him steal a few when the following hand comes up:

hero (1550) posts small blind 10
villain (1450) posts big blind 20

hero dealt 7 /images/graemlins/spade.gif 7 /images/graemlins/club.gif limps in.
villain raises to 150.

would you reraise or call. if reraise how much?



i reraised to 500. villain called. 1000 in pot.
flop j /images/graemlins/club.gif 8 /images/graemlins/club.gif 3 /images/graemlins/club.gif
villain bets 400 (has 450 left).
hero has 1050 left.

is folding an option??? what to do??? two balancing factors: blinds are still 10-20, villain is bettin with any two.