You'll want to go with at least 2GB of RAM to be on the safe side. I made the upgrade from 1GB to 2GB and there was a very noticable difference.
The CPU you mentioned should be fine as well. To get the game to run smoothly at Very High / Extreme... my friend was able to get it to run on a 7900gt at Very High. I personally use the 8800GTS (640MB model) and I *can* run under Extreme but it isn't very smooth. FPS drop out rather frequently when there are multiple character models on screen (very bad for a Templar, lag during a melee).
Now, is there a such big difference in graphics that you'd absolutely have to see it on Extreme to believe it? No, there really isn't. I personally found that starting with Balanced as my setting and then adjusting from there was my best course of action. Just remember that reducing Shadow settings is the easiest way to get the engine to pump smoother; for some reason Shadows slow everything the heck down (they do look pretty though).
And, of course, update your drivers.