Read this preview on this very site:
http://gamebanshee.com/previews/morrowindpreview1.php
To quote: "Thankfully, those that want an impression of how the game plays on a minimum spec machine will now get the chance to have it, for the game was previewed on my now 3 year old overclocked 464 Mhz Celeron, 256 megs of RAM, Radeon LE (yes, overclocked for maximum efficiency), but brand new just-bought-yesterday Sound Blaster Audigy."
Continuing:
"Before I continue, allow me to interrupt with a brief interlude on what the performance was like on my minimum spec machine... actually the minimum calls for a 500 Mhz PIII or Athlon. I figured with my fast IBM hard drive, decent video card and brand new sound card, I pretty much fit the bill for minimum. If you divide the distance slider, which is the most important determinant of framerate, into four pieces, then I found the perfect trade-off for viewability and performance to be a little under the 1/4th mark. Indoors, and in general inside of buildings, performance skyrocketed. It was only outside that the slider made the most difference. When outdoors in wide open spaces, performance was a bit better, and even setting all details to max wasn't too much of a hit to play. When in the towns, though, that bar needed to be at the 1/4th mark, except for screenshots of course."
Morro... anyone with less than a 450 pentium III play it? 
Linear Mode
