dot foldered, I'm curious about this as well. It's why I upped the iMac to 256 Mb of video memory. Just to future proof it because god knows what crazy effects 10.5 will enable.
Front Row will work just fine with the standard 128 meg. x1600 GPU. I think you *might* notice a difference if you opt for the 256 meg. x1600 with gaming (Doom3, F.E.A.R. etc.).
Umm... no, it's hardly processor intensive and it won't trouble an X1600. I have Front Row on my iMac with a 128MB Radeon 9600 and Front Row runs smooooooth. Come to think of it, I've heard of Mac Mini G4's running Front Row smoothly.