You're probably not going to post it if you know what it is, but I think it matters exactly how severe her criminal record is. Hence people in this thread may be forced to give advice based off faulty assumptions.
Anyway, I say take a chance. You're 17 and the chance to get with an older chick may not come by again, or even sex at all. And I'm speaking from experience. Last January (hell, I remember the month and everything) I met up one on one with a girl I vaguely knew and had some drinks, and I knew she'd had a crush on me. Eventually we got into oral but I backed out before we went all the way. I knew her enough to know that she isn't exactly stable, she would probably get clingy and I wanted to avoid that stress. So I let my head do the thinking and called it a night.
That was a fucking mistake, one I still regret. I opted out of what could have been a wild but fun relationship with someone tolerant and open-minded, one of the few people I've ever met who finds me attractive, appreciates my sense of humour and enjoys the same things I do (gaming, movies, and the fact that we've both done acid and such drugs)... All because I was afraid of a bit of baggage and drama. I was a picky idiot and, as if the sex gods themselves are punishing me, I haven't had any sexual encounters ever since. And for what its worth, I am 20.
So I'd say take the damn chance. Screw the criminal record, what your parents think, or even what your friends think. If you dig this girl, go for it. If all you want is sex there's nothing wrong with that either, although maybe you should clarify that topic with her and ask what she wants out of this. If shit starts to get REAL fishy as you learn more about her, then by all means do what you have to do. But if there's one thing I've learned about this topic the hard way, its that you'll never know unless you try, and you don't want to contemplate "what if" in the future all because you wanted to be on the safe side.
One more thing... Some people in here are suggesting the criminal record thing is a red flag. Now, I don't know exactly how she brought it up, but from where I sit, the fact that she was honest about it and brought it up as soon as possible shows some courage and honesty on her part. Not a lot of people would risk bringing that up at all, escpecially girls who are looking for sex or relationships. Everyone has skeletons, and if she can be that honest with you than you should feel just as safe with letting her know some of your demons.