The CPU wont run GTA IV without seriously reducing the gameplay value. Simple as that. I know it says 1.8GHz is fine on the back of the box but that's absolute rubbish. If they'd ported the game properly in the first place, then maybe.
But as said, get a quad core in one form or another and you should be fine. Although, saying that, GTA IV on PC is a difficult game to judge computer specifications for. I've seen people with Core i7s and GTX 295s having problems with the FPS in GTA IV, I get OK FPS on GTA IV on my E8400/8800GT, it's around the 25-45fps mark most of the time with most of the graphics options relatively high. I think it's just luck of the draw with that game whether a person's PC will run it correctly or not.
You may be fine with Test Drive Unlimited 2, it's hard to tell. But, looking at Test Drive Unlimited 1s minimum requirements and then assuming the graphics have been improved a bit for TDU2 you might just be alright. Although I'd say a CPU and graphics card upgrade would future-proof your system and allow you to run games better instead of hoping every new game has low enough system requirements.