Switch nailed it - the only issue you will have is that the vid card wont give you the full glory of graphix. But the game will be playable and enjoyable with what you have. As for DD and such - I honestly dont know how that kind of thing works - do yourself the favor of just getting the DVD. Then you dont have to worry about reinstall numbers.
As for 1.2 vs waiting for 1.3 - I would say just in. By the time you get acclimated - 1.3 will be out or around the corner. And yes - check the modding section for a number of great additions!
And Welcome Aboard!
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Good Hunting!
Captain Haplo
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