http://support.lucasarts.com/trg/tgd.asp?id=2569&g=144&s=8)
For optimal performance during Internet play, it is recommended that Jedi Academy be hosted on a fast computer (PIII 700+) with a broadband connection. Games hosted on fast Internet connections such as ISDN, Cable Modem, xDSL, or T1 will result in the best possible experience over the Internet. Having more than 128MB of RAM installed on the server system also improves network performance and stability.
Remember, that's the minimum. I sometimes run an 8-player server on a 1.8 GHz Celeron that is doing nothing else, and sometimes the CPU usage goes up to >50%, so I would say that is a more realistic number to avoid CPU-induced lag.