I did a lot of encoding and stuff on a PII @ 350MHz with 64Mb and later 128Mb of RAM. It was slow, but I did manage to produce some OK stuff with ULead Video Studio, it just took time.

Capturing was a different story although I got some acceptable results too. If you capture at low resolution (small size on screen) then you can't do much, but with a PIII you should get decent results.

Getting to know the basics is the hard part. Stick with it, and come back with specific questions, there are people sure to help you here!