@int86
the normal, window effects (minimize/shadow/wobble), the desktop cube, a bit of transperencies is all that will run smoothly. u may try other effects too and post about ur experience here so that it benefits others. these are the effects which i've seen run smoothly on a config like urs.
@kenshin
goto compiz settings and set the horizontal desks to 4. also enable the cube and rotate cube option.