It really depends. I have 3 Macs in the C2D 2-2.33Ghz range with 2-4GB (3GB usable) running Lion. While I would want something faster as my main machine, the older machines are still very usable. They work fine for tasks like video playback, browsing, document editing, light Xcode and light image editing. But they do choke on more intensive task like manipulation of RAW image files. I've never used Ableton, but it appears to be an more intensive app.
To be honest, I didn't see a significant performance impact when upgrading from SL to Lion. If you are seeing a dramatic performance drop, it may be a problem with the application (or you were borderline with the needed RAM under SL).