I started off with those kind of specs and mine run fine, the only difference was that I had a Core 2 Duo 2.13Ghz, Nvidia 8600GT 512Mb Graphics Card, memory 2Gb @ 667mhz and a DVD burner. So I say Go For It!
As for memory its very cheap now and that's no obstacle unless you want to play games like Crysis and stuff like that.
Actual requirements and product functionality may vary based on your system configuration. Windows Vista Upgrade Advisor can help you determine which features and edition of Windows Vista will run on your computer.
While all editions of Windows Vista can support multiple core CPUs, only Windows Vista Business, Ultimate, and Enterprise can support dual processors.
You don't mention graphics, but with on-board there just isn't enough grunt for the Aero eye-candy. Also DirectX 10 is very hard on the GPU. You probably won't get any blistering speeds. Depends on your useage.
Without knowing a little more about the card, and I'm guessing it's not your computer, all I could say is that the owner won't be playing Crysis anytime soon, but I'd be pretty certain there isn't much else they wouldn't be able to do. Those specs aren't real bad. Not everybody has a high end computor and a 2ghz Core 2 Duo is not a bad little processor. As for overclocking, you can, but there is a monetary and equipment cost. You have to weigh up if it is worth it. Unless the person is a high end gamer there is no real benefit for slight gain in performance you would get. For the cost of the cooling gear you could probably get a bigger processor. An extra gigabyte of memory would improve performance though and memory is pretty cheap/
No problems then. You might have to load your movies onto the hardrive to play them if thay are AVI. DVD's seem to work ok though in the Disk Drive. My daughter has a system with similar specs and apart from being slow to load and a bit sluggish compared to a higher end system it does all her work ok. She uses Office 2007 and Adobe Photoshop CS3 primarily. Adobe can put a strain on a system and although she has no trouble she can't open too many photo's at once. Best not to use all the pretty graphic stuff that's all.
If it is really only for movies, and MS Office then that computer is great.
My sisters laptop is a little under those specs and ran vista business fine (apart from that she has 512MB ram so it got too slow and she went back to XP).
With 2GB ram, and if you use it for what you have said, i doubt you will ever use more than 50% of it. That said don't take one stick out 2GB is much better than 1GB and i have found that even though vista doesn't use the extra 1GB very often it still makes it run better.