I can't remember exactly, but I think it was more or less what I've got now (it was the one that got killed by lightning), which is now getting long in the tooth a bit - it has a 7600 nVid and 2GB of ram I think, don't recall the CPU though. I'm debating whether to add an audio track I recorded for it because the vid is actually a couple of years old now (recorded using 2.45) and I've got other vids planned that are more up to date.
I've 'improved' the process a bit since so I only use the heightmap as a starting point, but yes, so long as you have the polys available and the gradients of relatively smooth in the image, it will give a pretty good rendition when displaced in to the mesh, you do need a high contrast image for best results though - so regardless as to what you're doing and what you're doing it for, you lowest value should be black and highest white (rather than shades of gray).