Im shoebox testing this whole mame thing (newbie) with an old celeron D 1.2 ghz and mame .135 (using the built-in video on the m/b). I also run tiny xp (friggin awesome).
I found it would skip and bog down alot unless I switched to directdraw 'mode' and even then I had to have it 'skip frames' automatically.
Later, I added an agp card (nvidia 440 something or other) because it had an S-Video port (my goal is to connect to a 27" tv). When this card was used, i had no skipping issues like I had previously. I've read that everything run through cpu and not video, but in this case it made a difference (I'm still learning).
Having said all this, I did not try any blitz, dark legacy, etc... All i was testing/running was the usual arcade classics.
I can't tell you if that pc is good enough or not, as I'm finding out as i progress in this project. But I think the video card (probably any video card other than built in) would make a difference. If you have spares lying around, try it out.