I was trying to find some statistics on what would be a common system for gamers these days but didn’t really find anything. Just off the top of my head I was thinking it would vary from hardware that is about 3 years old (PIII-P4, GeForce4-GeForceFX / Radion 9xxx) to the high-end hardware we have on the market today. So given this spread at what point is a reasonable area to draw the line? I know I want to use OpenGL but to support the older hardware I probably would have to have a 2.0 and 1.4 implementation of the engine under the hood.

If you're aiming at "hardcore" gamers, then the Valve Survey (which is continually updated) will work pretty well for you.

If you're aiming at a wider audience, then you have to consider anything from an Intel 845G running on a 1.5 GHz Pentium 4, with 256 MB of RAM, up to a Core 2 Quad with an 8800 GTX SLI and 4 GB of RAM (3 GB usable).

It looks like the minimum system these days is quite powerful; a P4 with a GeForceFX card is very common and that’s a good minimum for me to be shooting for. Well thanks for the resource

Also, you don't need separate implementations for OpenGL 1.4 and 2.0! You can just optionally use extensions from 1.4 to get all of the functionality of OpenGL 2.0. Just use a library like GLEE to make querying and loading extensions easy.

That way you don't just have 2 settings '1.4' or '2.0'; you can have separate settings for shadows, filtering, and lighting, for example, and you can probably do it from one rendering codebase with some if statements for different settings.