I'm not sure about the minimum requirements...check with the Microsoft web site for those. But Paul Thurrott recommends a 300 MHz processor with 128 MB of RAM. I would add that 192 MB of RAM is much better, since you'll rarely ever go into the swapfile with that much during daily office use. And, a TNT2 level video card (or a Voodoo 3, or a Matrox G400) is a must, with the new Radeons and GeForces being better; you need a good video card for the GUI to seem "snappy," especially if you like the fading menus and shadow behind the mouse cursor.