i would say interface-wise, anything more than ~600mb of ram, and tiger's fine, no matter what the processor. in fact, because the code is better optimised with ever point release, it actually runs some stuff faster (window resizing etc).
the things where you notice the processor's lag are in video encoding/decoding, image encoding (saving stuff in photoshop, adding filters etc) and games. then to a lesser extent, scrolling through compelx webpages, word documents etc.
i would definetly reccomend you fill that machine up with ram, put tiger on there and reassess your situation. you may find yourself very happy.