I've got a nearly 8 year old AMD Opteron DDR1 machine (that's soon to be retired) running Win8 without any problem whatsoever. I can run Office, Modo, Photoshop, and a browser with multiple tabs open on it without any lag or hiccups whatsoever. It shows its age sometimes in weird ways, but it's hardly a chunkity, slow experience. By this point, that little Atom is probably faster than my once high end, cutting edge PC.
Some people greatly overestimate the requirements needed for a smooth experience.
That's a pretty cool machine that you have there that was once high-end, like you say. It's probably either a dual core or dual CPU that was one of the early CPUs with a 64-bit instruction set. How much RAM do you have in it and do you have a good GPU/video card?
As an example of this, I have a PowerMac G5 Quad that is 10 years old and I can still run CS3 apps, Office, iWork'09, as well as other modern applications and it handles them very well. The only downside is that Flash is not supported on my PPC Mac and because of that my web browsing is where the age of my machine and its limitations are revealed. I also have a 2004 iBook G4 (single CPU at 1.2Ghz and 1.25 GB RAM) that still holds its own and is more than capable of serving as my media hub and streaming my iTunes library, as well as my primary laptop. My point was not that an old computer couldn't handle Windows 8, it was that Windows 8.1 can bog down machines that have underpowered processors that don't have enough RAM to compensate for the demand on those CPUs. In my opinion and from my experience with Windows tablets, 2 GB RAM and an Atom CPU (regardless of the fact that it's a quad core) will not lend itself to a good and sustained Windows experience.
I think the real benefit to this version of the Surface is that Windows 10 will be released soon and this was most likely designed for that version of Windows.