I play very often on pretty much the exact same netbook as the OP. It runs fine, but I crash randomly to the desktop from time to time. But I think that has more to deal with windows 7 than the actual netbook.
I have actually raided on it with great success. You just have to turn all particles off and basically everything else off. Then run the netbook on "high performance." On "power saver" it will lag no matter what. If you're used to having spell effects, it will take some time to get used to having them off, but that was the most helpful thing that I did.
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