The current 12" will give you equal vram and a .25 bump in processor power. The only real down from what you have now is the memory on a 12" can only go to 1.25 gig.
Bottom line, if you are willing to have basicly the same power you have now then the 12" PB will work. But if you are wanting a true "upgrade" then get a 15, or 17 powerbook with more ram ability and vram (possibl 128 meg) and faster processor.
I run Cubase SL 1.6 on my 12" combo (stock except for 1.25gig ram). I have no problems at all, but I bounce vst midi to audio to take the major load off the processor. If I run Virsin Tera 2 (serious VSTi Synth) it really eats the processor, but by bouncing to audio (some call it freezing a track) I can do whatever I want.