I played neverwinter nights with a video card similar to your RADEON. I had an NVIDIA MX 2 with only 32 M of memory.
My system was a 750 MHz with only 256 M of RAM without any problems.
Here are a few tips.
Shut down any software resident programs running from your windows (anything in your system tray such as anti-virus etc...) this will free up some system memory.
You may try to increase your virtual memory as it may help.
In your BIOS (hit DEL on boot up to go to the BIOS window) check your video memory aperture size and make sure that it's set to 1/2 of your system memory (e.g. set to 128 M if you have 256 etc...)
Download the latest driver for your video card model
In the video card settings (right click on windows, then properties, advanced, settings) make sure that AA (anti-aliasing) is off. Some cards will offer you different options so go with the ones who will increase performance (you will lose some graphic quality)
In the game option menu, play with the game resolution. Try 1024 X 768 or 800 X 600.
Also disable some of the more graphic extensive options such as shadows etc.... again this will increase performance at the cost of some eye candy.
Hope this helps.