I have a Celeron 400 w/ 128 MB in my cab w/ a PCI ATI 8MB card so the specs are pretty close, if not worse in some respects. I'm outputting to TV so I use the "Sharp" setting whenever possible and sound is at 22,000. I use the latest version of Mame (not DOS but Windows based).
"Sharp" is a speed thief but here are my typical experiences using it:
You should have no problem w/ classic (8 bit) games, except Bally games that use the Vox voices. Wizard of Wor and especially Gorf will chug along. System isn't too happy w/ vector games either unless you frameskip, say 3 or so.
16-bitters from the 80's are usually OK w/ frameskip 6 (every other frame skipped). Just depends on # of sprites on screen and how complex (# of support CPU's) the original game had. Some games that I figured would be too complex (Simpsons) run fine, other's that I thought would be OK (Neo Turf Masters) are unplayable.
Neo Geo's and CPS1/CPS2 games I play on Kawaks w/ frameskip 2 (again, every other frame skipped) and have no problems, even w/ CPS2 games.