The marketing on integrated video is terrible as it's the absolute cheapest option that people only want if they're on a budget or if the computer is for someone else.
However good the performance, you're still using system RAM. Integrated is fine for office work today (one of the monitors on my work system uses integrated and if I added a third monitor on my home machine, it would run off the integrated) if you're running XP which most business folks will continue to do.
I don't have an assessment on Vista yet but my guess is that the "experience" is better with a card that has its own memory. Companies that make integrated video could do themselves a favor by just adding local memory chips for integrated video - I wonder why they don't.