Gothic 3 Crap machine...

I am trying to run Gothic 3 on this:

1GB of ram
Pentium 4 2.8GHz
ATI Radeon 9200 128mb

It works, there is a lag in the beginning battle and sometimes when there are a couple people in sight.
I have put everything on the lowest setting, is there anything else that I can do??

Install the latest community patch.
Maybe buy another GB or RAM.

Welcome to RPGWatch!

No, there's nothing you can do. I'm surprised it runs at all. To put it bluntly, you can hardly expect to run any reasonably up-to-date game on an office PC like that.

The CPU is okay, but you clearly don't have enough RAM. When a program runs out of RAM its performance stalls. It's like driving a Ferrari at maximum speed and then suddenly stopping, getting out and pushing the car. We're talking access time going down from ns to ms in combination with a decrease in transfer rate.
"Not enough RAM" is never a situation one should be in.

The graphics card is completely outdated. I would have expected the game not to start at all.

And I thought my laptop was bad. You need more RAM and a better graphics card.

the best way to improve performance without installing anything is to change paging from C:\ to another drive or partition
start / right click on MY COMPUTER / properties / advanced / performance/ settings / advanced / virual memory / change

That's a good tweak, but unfortunately it's not going to help him in this situation. Like Gorath said, that graphics card really needs to be replaced.

Buying a new machine is better...