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No, you can't be less then a 1.0. a 1.0 means you can't run Aero. Aero just means transparencies, dragable video boxes, opaque windows and the ability to move in-function video and directX streams. If you have a 1.0, Windows is still usable, just without the features of the Aero...

Yes, it will run fine. You can run it on less, you just won't get aero. But you'll be fine with an intel 4x series.