500MHz is probably pushing it a bit, but as a comparison, BBH told me that his PC runs CPS-2 games in MAME at a frameskip of around 3 with sound enabled. His PC runs at 450MHz, btw.(posted 8717 days ago)Video cards can make a difference in MAME's performance, although the difference these days is pretty minor. A GeForce 2 based card is perfectly fine (I have a cheapo 32MB TNT2 M64, which works brilliantly with MAME). The problem you mention does sound somewhat like a common timing problem with DOS MAME running under Windows. Easily fixed, just use a Win32 version of MAME (either Win32 console or MAME32).
RAM should be fine for most games, although the Neo Geo games with encrypted GFX will take some time to start up.
Also, before anyone gets any strange ideas, while it's true that Direct3D support is being worked for MAME, this does NOT mean that 3D games will be 3D accelerated. Simple reason is that it would be inaccurate to the arcade. And no, that doesn't mean that 3D arcade hardware isn't being worked on for MAME either. ;)