Light webbrowsing. HTML, DHTML, JS, forms, u/p fields, less than 5 animated gif's.
Med webbrowsing. Light + JS, little Java, less than 3 small flash/shockwave apps, scrolling banners/stock tickers, 5-10 animated gifs, jpg's over 500k, small imbeded video file in a simple webpage.
Heavy webbrowsing. Med + 3or more Java applets, 1 or more large flash/shockwave apps, more than 10 animated gifs, jpg's over 1mb, large imbeded video file in a complex webpage with js/java/flash/ani gifs.

I think that can help get the idea. Yes, webbrowsing can get pretty cpu/ram/video intense. Lots of webpages now adays aren't "just a webpage" anymore. They are feature rich content pages. I've seen many systems under PII power with 256mb ram choke on medium webpages. Flash, on a system that can't handle it, can really slow it down.

I tried that DragRacerOnline game on my system at home, Dual P3 1.1ghz, 1gb ram, matrox g550 video and it ran great! Tried it on my system at work (even turned the sound off) with a P4 2.0ghz and 256mb ram and some intel "advanced" graphics GPU and it could barely run the game. It doesn't take up much room on the screen but I noticed the system was swapping horribly and cpu use was 100% the whole time.

So yes, more ram and better graphics can really help even simple old webpages.