Integrated graphics are obviously not as good as discrete graphics cards but they are slowly getting better and better. Intel is showing off the G965's new hardware vertex shader feature at the GDC in San Francisco:
Nick Knupffer, PR Manager for Intel, showed off a beta hardware vertex driver that should speed up many first-person shooters. Time demos of Call of Duty 2 and Half-Life 2 Episode One were played and we saw that the G965 chip averaged around 30 to 60 frames per second. We did notice a few cases of slowness during some of the more complicated scenes, but Knupffer told us that this "Four dollar" integrated solution would still please most people.
Knupffer was quick to point out that integrated still won't replace discrete graphics cards anytime soon and added, "People who need extra power will still buy a discrete card." He also said that Intel is positioning the G965 graphics chip at running the most popular games, not necessarily the most graphically intensive games.