My machine is pretty out of the arc now. A 3GHz P4 (S478, don't think it's a Prescott, it does have HT though) with 2GB RAM (DDR400 I think) and an 128MB ATi 9700PRO (old AGP card, running it with a fairly recent release of the Omega "tweaked" ATi drivers). And have a Soundblaster Audigy 2 ZS Pro (or something that sounds similar - comes with a big black box that connects to the soundcard. Not sure how good it is by todays HD standards though).
As long as I don't go above 1024x768, don't use AA, and don't crank the AF above 8, it's not too bad.
I know I could do with a newer, faster, more powerful machine, but I'm holding out for now; Waiting to to see what developments come out CPU wise in 2007 from both Intel and AMD, plus my Dad's E6600 system / ATI X1650 doesn't seem to be the most stable of machines and games like Knights of the Old Replublic don't run that well on it (I have read that forcing the game to use only one core makes it run a lot smoother, so will try this the next time I visit my parents).