It would be fine as long as you're not trying to run more than two or three plugins. If you just use the G3/Cubase for a sequencer, and use hardware sound modules and samplers, you'll be fine.
A fast G3 is enough to use Cubase and more than two plugins.
I run a P3-850 w/768MB RAM and I can load up more than a few plugins in SX2. I JUST switched to SX2 recently from VST32-5.1R2. Granted, I could run far more plugins in 5.1 than SX2, but SX2's new features allow me to free up clock cycles easier when I need to.