Given that I currently have a PII and a PIII running quite nicely with older stuff (Pacman, Asteroids Bombjack etc), I would think that this spec would be quite sufficient.
Really depends on the OS chosen though.
Something light without a GUI overhead e.g. Dos or Linux* is going to be much faster than Windows.
*Yes Linux has many GUI's but they can be made optional.
I usually use GLauncher for most of my machines - DOS based, and fast.