lol that'd be even worse
Regardless of the recommendations programs take more than what's just listed on the box. This is true for Trainz and any other game out there. It is recommended that you have 1GB RAM and a 128MB video card, however to run well Trainz really does need 2GB RAM and a 256MB video card (a good 256MB video card).
In your particular case the biggest bottleneck is that old 64MB video card (I'll go out on a limb and say either a Radeon 7000 or 7500). A good boost in performance will come from an
X800 GTO/Pro/XL/XT/XT PE or
HD3850 all are AGP 8x so there will be a slight drop in performance (due to your current motherboard limitations. However, there will be a very noticeable difference from the old 64MB card.
After the video card an upgrade in RAM might be in order. Windows XP on it's own usually takes around 512MB RAM so that leaves around 512MB for Trainz and I've seen Trainz take up to 1GB in heavy situations.
EDIT: ok here's some comparisons to get an idea how slow each card is
Radeon 7500 (GPU 290mhz, Memory 230mhz DDR 460mhz effective) vs X800 GTO (GPU 400mhz, Memory 490mhz DDR 980mhz effective)
http://www.gpureview.com/show_cards.php?card1=239&card2=356
A huge difference in raw GPU/memory speeds as well as pixel pipeline count. The more pixel pipelines the better. The 7500 has 2 the X800 GTO has 12
X800 GTO (GPU 400mhz, Memory 490mhz DDR 980mhz effective) vs X800 XL (GPU 400mhz, Memory 490mhz DDR 980mhz effective)
http://www.gpureview.com/show_cards.php?card1=52&card2=356
What makes the difference between the X800 GTO and the X800 XL is pixel pipelines, the more the better. The X800 GTO has 12 and the X800 XL has 16
X800 XL (GPU 400mhz, Memory 490mhz DDR 980mhz effective) vs X800 XT (GPU 500mhz, Memory 500mhz DDR 1000mhz effective)
http://www.gpureview.com/show_cards.php?card1=52&card2=46
The only real difference here is raw clock speeds, giving the X800 XT better performance
X800 XT (GPU 500mhz, Memory 500mhz DDR 1000mhz effective) vs X800 XT PE (GPU 520mhz, Memory 560mhz DDR 1120mhz effective)
http://www.gpureview.com/show_cards.php?card1=39&card2=46
Again not a huge difference, but again the X800 XT PE clock speeds are higher and give it an edge over the X800 XT
X800 XT PE (GPU 520mhz, Memory 560mhz DDR 1120mhz effective) vs X850 XT (GPU 520mhz, Memory 540mhz DDR 1120mhz effective)
http://www.gpureview.com/show_cards.php?card1=59&card2=39
The X800 XT PE actually is a bit faster than the X850 XT
X850 XT (GPU 520mhz, Memory 540mhz DDR 1120mhz effective) vs X850 XT PE (GPU 540mhz, Memory 590mhz DDR 1180mhz effective)
http://www.gpureview.com/show_cards.php?card1=59&card2=57
Basically at the time AGP came to an end (it's dead basically almost no-one makes a new card in AGP) the X850 XT PE was the best one could get.
X850 XT PE (GPU 540mhz, Memory 590mhz DDR 1180mhz effective) vs HD3850 (GPU 668mhz, Memory 828mhz DDR 1656mhz effective)
http://www.gpureview.com/show_cards.php?card1=550&card2=57
Then there's this monster. Unlike nVidia, ATI has chosen to continue supporting AGP, but I wouldn't hold my breath on it continuing for long.
And for good measure:
Radeon 7500 (GPU 290mhz, Memory 230mhz DDR 460mhz effective) vs ATI Radeon 9600 (GPU 400mhz, Memory 300mhz DDR 600mhz effective)
http://www.gpureview.com/show_cards.php?card1=75&card2=239
Obviously the Radeon 9600 will be better than the 7500 but it's a very small step up and isn't worth the cash in my opinion
ATI Radeon 9600 (GPU 400mhz, Memory 300mhz DDR 600mhz effective) vs X800 GTO (GPU 400mhz, Memory 490mhz DDR 980mhz effective)
http://www.gpureview.com/show_cards.php?card1=75&card2=356
yeah it ain't pretty, even the lowly GTO (still a good card in its time) gives the Radeon 9600 a good floor wiping