No it isn't true that older video cards won't work, you may have to use the vesa drivers, so you won't be able to use desktop effects, and you may not be able to use the highest possible resolution your monitor is capable of, but the system will work quite adequately for many years to come.

I have an old circa 1998 Compaq with a 450Mhz Celeron, 512MB Ram on board ATI Rage Pro, it runs several distributions quite well with 1024X768 resolution, and is quite usable. It will probably run Ubuntu, I just haven't got a round to trying it yet.