LOL! Dracula, I feel your pain!
I currently have a pretty good desktop rig, but much of my time working with 3DWS and DBPro is spent on my laptop -- an old Pentium II 300 MHz, w/ 192 Mb ram and 16 Mb (also shared) graphics card. It works for the small experimentational things, though.
I don't know anything, really, about that particular graphics card of yours, but I don't think it's the main problem; I definitely recall having problems with 3DWS on my laptop when I only had the demo version. I don't remember having your particular problem, but I couldn't get the textures to apply to the brushes/objects, and the brushes would not even show up in the 3D perspective window. After receiving the full version on CD and installing it, then installing the updated versions, everything worked fine...and still does.
I would advise getting a new graphics card if you can, though, as you will be kind of limited once you get into creating complicated scenes, and the render times (especially due to lightmapping) will take an awful long time. Your processor (I'm guessing it's an Athlon XP 2800?) isn't
too bad, nor is the amound of ram.
I think very highly of 3DWS, especially when you compare the price to other programs. I certainly can't guarantee that getting the full version on CD will take care of the problem you are having, but, for some reason, it did take care of the ones I had.
Good luck.