Yeah it's pretty old.
P4 2.8 GHz HT, 512 MB RAM.
The purpose of rendering to MPEG-1 is to save time over rendering to MPEG-2 which is the final goal. However I rough edit my vacation videos to something quick so I can review them, take notes and trim/fade/etc, for final cut then I would use MPEG-2. So, if some other output format is also quick to render and compatible with XP MCE, let me know, I'll try it!
btw I use Sony Vegas 7.0 for video editing/rendering.
Thanks,
DL