It will run on high too but Medium will be good cause you will get more fps with it
At 1280x1024, I think you can play it comfortably on HIGH setting..
Yeah, at 1280 x 1024 I would also second MED to MED-HIGH. - Maybe with 2 x Anti-Aliasing even since it's a low res.
HIGH on a video card with a 128-bit bus in any ARMA II MOD might be asking a little bit to much of it, but it certainly won't hurt to try. (I understand DayZ to be even heavier than the original game).