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The term Integrated Graphics refers usually to a graphics chip included on a motherboard, as opposed to a dedicated GPU card that would be much more powerful. Integrated Graphics chips are nothing new in the industry, and today (March, 2011) over 90 percent of computers and laptops shipped contain Integrated Graphics solutions.
The graphics chip generally will use the system’s RAM for its memory needs, as opposed to high-speed dedicated memory that is included with a graphics card.
The solution is good enough to drive a monitor and handle less intensive graphics tasks. One thing for sure is that they are getting better, going from not being able to handle most commercial video games to being able to handle more and more on low settings.
There is still a big gulf in the performance of an Integrated Graphics solution and a high-performance graphics card. That same gulf however is realized in the cost of a powerful modern video card, compared to a system with Integrated Graphics.