should run on medium settings with that card.
im not familiar with the Athlon 64 2400+
its not a sempron is it? if it is you may want to upgrade that. the physics arent super complicated but with multiple enemies a sempron may not be able to keep up.
do you mean 4200+?
id upgrade the sound card, integrated = crap. i didnt notice when i upgraded, but when i downgraded temporarily i realized how bad integrated was.
what type of hard drive? i definitely noticed the biggest difference in oblivion when i upgraded to RAID 0
its DEFINITELY worth the money though. $50 seems like a lot at first, but once you really get immersed in the game you'll realize why it costs that much... because of the amount of time they MUST have put into programming a game as extensive as this one.