Also, the more system memory, even more better! I personally recommend more system memory (RAM) as its more useful than just an upgraded video card.
More memory certainly does help the game run more smoothly but you still need a good or better video card for turning on all the advanced features and increasing the amount of visitors you can have. Case in point: I had two computers on which I ran the game. A laptop with 1 GB of ram and a Mobility Radeo 9000. My other computer was a desktop with 256 MB of ram and old GE force 2 TI. The game on the laptop was playable but all the video settings were at minimum and increasing them created a lot of video lag. I was limited in the size of my lots and having too many sims on my lot would slow my game to a crawl. Alt-tabbing to the desktop was quick and painless however. On the desktop the game was barely playable. It took forever to load and ALT-tabbing to the desktop was an ordeal. Then I upgraded my desktop with a once top-of-the-line but slightly outdated video card. The game was smoother but still slow to load and ALT-Tabbing was pretty much out of the question. Then I upgraded my ram to 768 and now loading times are better. However, I still need to restrict myself to small houses and middling to low video option settings or the lag gets too annoying. So you pretty much need both if you want a really smooth Sims experience