I run Office 2000 on an absolutely ancient creaking Athlon XP 1700 (Thoroughbred) and it copes. I assume you're a bit more up to date than me and have Office 11; I wouldn't expect it to be much different resource-wise.
Sims 2 would be another kettle of fish; I'm no gamer, but I wouldn't expect a £400 notebook to run games. It'll have the simplest of integrated GPUs and hold on to some of the system RAM for its own use.
BTW - see if the FE will move this to Consumerwatch; more relevant there, so you'll get more replies.