With a Radeon 9700 and AMD 1200, you'll have to limit yourself to medium - high detail settings (not highest), but should be quite able to use very high resolution.
If you want to be able to increase details to enjoy the higher resolution more, you will need a faster CPU.
If you're not quite ready for that yet, but find some detail problems, if you only have 256 ram you could upgrade to more, that'd make a difference as well.
Of course, you'll enjoy the graphics performance boost even if you don't add anything but the Radeon 9700.
-Col.Kiwi