Agreed. The GeForce FX5200 is one of the slowest video cards still being made. In fact, the old iBook's Radeon 9200 was in essentially the same situation as the current iBook - the Radeon 9200, though it doesn't support CoreImage, is a faster overall video card than the FX5200.
However, none of that matters when these poor Radeons are stuck with just 32 MB of VRAM. I have a Mac mini, and I'll tell you right now I can't play Quake 3 at max settings (this game came out five years ago, maybe more... the point is it came out so long ago I can't even remember!). Know what happens when I try? It runs smoothly, but it stutters. Between stutters it is a smooth 50+ fps. But it constantly jerks around because the video card doesn't have enough VRAM to cache all the textures used by the game (when the settings are maxed, that is). What happens is the GPU sends extra unused textures to the system RAM, and then when it needs those textures it has to move other textures out of the dedicated VRAM and back out to the system RAM to make room for the ones it needs. In short, even though the Mac mini (and iBook) use dedicated video RAM, they still have to share system RAM in order to play games. This degrades performance a lot.
Even the dog-slow FX5200 is fast enough to run Quake 3 with maxed settings with no problems, and since it also has enough VRAM at its disposal, it should beat the 32 MB 9550 in most games. If you turn down the texture quality in Quake 3, it should fix things.