Breaks down into a few parts:
* X700 - this is the engine or what does the actual work. The X700 does a good job and is right in the middle. It will play the latest games, but not at full throttle with all the effects turned on. In a year or two it'll likely be hurtin' to play the games that come out in 2007.
* 256MB RAM - a measurement of capacity, not speed. Sure, you need enough memory to get the job done, but the X700 isn't exactly a strong enough card to be handling 256MB of stuff. For example, you'll have some of the game-settings turned on, but not all of them because you need the game to be fast enough to be playable. I'm guessing you'll be using around 90+MB of video memory on the latest games as the X700 will poop out on performance before you get much over the 128MB mark. If you had an X700 w/128MB of video memory, I'll guess that they'd test out very similarly.
* PCI-e - this is the connection to the motherboard. True, the PCI-e can handle more traffic than the older AGP (and much more than the even-older PCI...non-e). However, the X700 isn't powerful enough to really be overwhelming the AGP bus.
* Extras - TV-out/DVI - if you have a DVI connection to an LCD, then you might be able to notice the increased quality. TV-out is nice if you ever do that sort of thing.
Decent choice for bang-for-the-buck with a little gaming? Absolutely!