Im currently using the ATI Radeon Express 200 integrated video card (for the time being) on my current desktop ( AMD Athlon 64 3500+/ 1GB PC4200/Windows XP Pro SP2). I would say the ATI RE 200 is on par with my Geforce FX 5200 128MB in my other PC. Games run about the same fps with same settings. I am able to run Sims 2 and Sims 2 Pets without a hitch on my setup. I can also run more demanding games such as Half-Life 2/F.E.A.R./ Far Cry/Battlefield 2/etc... @ 1024x768 res, with medium settings.
I have to agree with Tiger-Heli since, I do have issues with some demanding games getting the chipset to hot after a few hours which results in the Motherboard shutting down the system for safety reasons. If you are able to replace the heatsink on the ATI (Northbridge ?) chipset with a more efficient one, you may be good to go. The ATI RE 200 integrated graphics are much better than the Intel Graphics Media Accelerator 950 integrated graphics IMHO.
I have no idea how it will run on your machine, but if it runs like crap, you can always get an old video card for around $20 and put in in there. A quick check on newegg and it looks like the GeForce MX4000 and the Radeon 7000 are around that price, both of which should be more then powerful enough to run sims 2.
I know from experience that the ATI RE 200 graphics will outperform any ~$20 graphic card such as the GeForce MX4000 and the Radeon 7000. The only issues it has is it prone to overheat if to much load is put on it.