The laptop will run GW pretty well, but don't expect miracles. I've got a very similar laptop (T7100, X3100/965 graphics). I don't play often on it, but when my niece visits it gets a pretty good workout.
Make sure you install the latest drivers (14.36.5.5016 for XP - the 14.37.0.5009 have a few glitches).
I personally prefer to run in DX8 most of the time (-dx8 -noshaders), as the grass shimmers too much in DX9. There's no option for anti-aliasing. Some drivers have glitches in DX8 (in particular, Hayda had some nasty artifacts), but I haven't noticed any yet with the 14.36.5.5016 drivers.
[edit]Just noticed that there's a new driver version for XP:
32-bit (14.37.1.5029):
http://downloadcenter.intel.com/Deta...stems&lang=eng
64-bit (14.37.1.64.5026):
http://downloadcenter.intel.com/Deta...stems&lang=eng
The latest Vista drivers:
32-bit (15.12.2.1637):
http://downloadcenter.intel.com/Deta...stems&lang=eng
64-bit (15.12.2.64.1637):
http://downloadcenter.intel.com/Deta...stems&lang=eng
I haven't tried them yet.[/edit]
Settings - best to turn off shadows entirely (or have them on low). It's fine to have textures on high. Probably leave shaders on medium if you're running DX9. Reflections should probably be minimised - no higher than sky and terrain.
I find that it tends to be CPU limited, because so much of the graphics is actually dependent on the CPU. Most of the time I get around 25FPS at 1280x800, but in highly-populated outposts it can easily drop to 15FPS.
When I buy another laptop, I'll make sure it has better graphics (in particular, be able to do at least 2xFSAA), but if you're getting the laptop for free it's definitely capable of playing the game.