I don't have my (Ubuntu 7.04) installed yet. I do have the PVR-250 card and I don't anticipate any problems. Your CPU is on the slow side for playing video and your 40GB drive is small also. The PVR-150 has it's own hardware encoder, so that should not be a problem. Playing video with MythTV requires a lot of CPU power (usually at least around 1.3+ GHz, if I remember correctly). Your PC is pretty old (from your description of the hardware), so you might want to think about upgrading it first, before installing and trying to use MythTV. It doesn't need to be an expensive one, just one that has a newer, much faster, CPU and more memory.
However, from what I've read on this forum, you should upgrade to Feisty (7.04) as it will make the integration of the PVR-150 and MythTV much easier (although it will work with 6.06 - Myth just requires more work to get it functioning, see the mythtv-howto: http://www.mythtv.org/modules.php?name=MythInstall
NOTE: You do have to upgrade to Edgy Eft (6.10) first (according to the Ubuntu "How_To" pages, before doing the Feisty upgrade).
One note, recording video is a memory hog. When I record at, DVD (SD) quality, the files are about 2.5GB/hour (before editing). After I edit out the commercials from a 2 hour show, I get a 4.28GB file which just fits on a single layer DVD-R disc. Your 40GB HDD won't hold much video. I've easily filled up a 500GB HDD and have several external 400G drives for backup files and additional video files.