I do just fine with a 2GHZ Core 2 Duo (1MB L2) desktop PC with 1GB RAM (I've even used it to run Windows Vista in VMWare on Ubuntu). Heck, you wouldn't notice the difference between my PC and my 1 year old MacBook with 2GB RAM and a 2.4GHZ Core 2 Duo (2MB L2), mostly because I keep my Ubuntu install in very good shape. If I was using Debian, Arch or Slackware, I could get even more performance out of this baby.
It's likely that I will not be upgrading this PC for a few more years. Thanks to cheap, low-end netbooks, operating systems are getting lighter. I expect this trend will continue for some time, and I intend to take full advantage of it, partly because I don't want to waste perfectly good electronics, but mostly because I want to see how long I can keep them running :p
Computers never get old. They just become incompatible with the state-of-the-art.