
I don't know what hard drive he has, but 320x240 @ 800 kb/sec should work fine and will output at about VHS quality. If he wants to capture full screen video (640x480 @ 3 MB/sec - NTSC) he should definitely consider getting a new computer. I am currently working on a AMD 400 with 128 megs of RAM and a 7200 rpm hard disk. This isn't a great machine by today's standards, but it's all you'll need.
BTW- Memory is getting cheap again. The best upgrade your friend could make would be to get himself some more memory (esp. good if you need to quickly Preview a clip in Premiere 5.1). You can buy 64 megs for under $90.
Hope this helps 
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