From what I see and can reccommend, Windows 7 or a 64 bit system is a must, and also get a 1 Gb Graphics card with Direct X 10/11 support.
I also had a 512Mb card, but since upgraded to a GTX 550 Ti with 1Gb GDDR5 Ram, it supports Direct X 11, but I need Windows 7 for that anyway.
Also got 3.5Gb RAM, so our systems are pretty similiar, but your processor is better for CoD, being Dual core and more powerful than my Quad Core, since CoD doesn't support Hyperthreading or Multi-core machines yet/very well.
"3. Performance. We are in final stages of testing a thorough overhaul of the game’s graphic engine. It won’t look any different but it will be much more streamlined. It’s too early to say what the FPS increase will be in the final version, but it shouldn’t be less than 50%. "
Their main Priority, so with a new 1 GB Graphics card you should be able to run CoD nicely at 35-45 FPS in Combat with High/Medium settings on. I currently get 30+ FPS in a Battle over the channel, and I can fly smoothly. Eventually when we upgrade to Windows 7, which alot of games use features from DX 10/11 now we should be able to get even better than my estimates.
And like you I could easily run games like Crysis, Oblivion, Battlefield on high settings with my 512 Mb card. So from now on I'm less worried about Performance issues in CoD and more annoyed with all the bugs.