My quad can play 1080p, but I usually have to have it cranked up to Highest performance. In Automatic and Reduced, it drops frames. It can play 720p just fine in Reduced. The codec makes a huge difference -- WebM 1080p, for example, is absolutely abysmal, but most MPEG-4 profiles will work because of the hardware assistance.

I doubt systems slower than 2.0GHz will play 1080p content well, if at all, but even a fast G4 running full tilt could probably eke out a decent framerate for 720p.