I did the same and after trying a few apps I ended up using MediaPortal (www.team-mediaportal.com)
It's an opensource media centre replacement, pretty stable, good community, well supported, regular updates and most importantly, doesn't need a monster machine - your spec should do just fine. I'm running it on a 1.4Ghz Celeron machine with 1Gb of RAM and a Geforce 4MX - no problem.
It's an opensource media centre replacement, pretty stable, good community, well supported, regular updates and most importantly, doesn't need a monster machine - your spec should do just fine. I'm running it on a 1.4Ghz Celeron machine with 1Gb of RAM and a Geforce 4MX - no problem.