well, I've been playing for quite a while with 1.66gHz 512ram and ati radeon 9000 64mb and I don't have serious problems at all. Yes I get significant lag in high traffic zones. Yes I need to reboot after 3 or 4 hours. Yes I run in extreme performance. But all that is easily overlooked for such a great game. Normally, to cut back lag, I go the zone I plan on spending some time in, camp, reboot, start again in that zone = and I'm able to play lag free for hours. The longest I've gone in a zone w/o ANY lag issues was 10 hours (commonlands). So the answer is yes, you can play with a horrid video card and low ram rather nicely.
(I was just given a Radeon 9600xt 256mb card recently and am yet to install. I'm eager to see the difference!)