I watch DivX videos daily on my main machine. A PII 400 with 256megs ram running Windows XP. (A good video card [ie. NOT integrated] will make a BIG difference - my parents Celeron 700 with integrated can only play divx videos in a small player window)
I have a video on my system thats like 40 minutes long, but is 700megs in size, so its really high bit rate and my system plays it.
The latest release of DivX is pretty fast on slower systems. 5.1.1