The easy answer is yes. I have a 4200RPM hard drive and it really gets annoying when loading big games, running huge programs, etc.
I would say that with any computer (at least with XP) you need a 5400RPM hard drive and up, and at least 512MB of ram. Although I would recommend you stick with a 7200RPM hard drive, the 5400RPM hard drive is fine. It loads programs much faster than the 4200RPM.
While upgrading the ram to about 1 GB is a great thing to do, it’s not replacement for upgrading the RPM of your hard drive. In my humble opinion, I would rather pay more for a 7200RPM hard drive.
So if you plan to run games, you need at least:
 5400RPM hard drive
 512MB of RAM
While a video game can run on a 4200RPM hard drive, it’s highly not recommended. In my experience, you will get frustrated with your computer if you don’t have a 5400RPM hard drive – I would know, because I have a 4200RPM hard drive and it annoys me like crazy when loading games and such.
After Church this past Sunday, I got to use my friends Compaq laptop. It had a 5400RPM hard drive and you could see a huge difference in speed. I can’t imagine the speed of a 7200RPM hard drive (just like my desktop!). So with my next laptop, I won’t make that mistake again.
So to save time, trouble, and frustration, get a 5400RPM hard drive or more if you can. Trust me, you will not regret it.