Here's the official word from Microsoft on the recommended system to run the newest version of Windows.
Hardware
A faster Pentium or Pentium IIpowered PC (166 megahertz or better).
At least 32 megabytes of RAM.
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4-gigabyte hard disk.
TV tuner card.
DVD drive.
56k bps modem or ISDN.
USB (Universal Serial Bus) capable
15-inch monitor with dot pitch of 0.28 mm or less.
accessories
Color inkjet printer.
Sound card and speakers.
Scanner.
Videoconferencing camera.
Digital still camera.
