Playing HD-quality videos purchased on the iTunes Store requires a 2.0GHz Intel Core 2 Duo or faster processor
Your system is on the verge of the minimum requirements.. It might help to quit any other open applications, but I imagine it will still struggle on faster moving scenes.
I don't recall if this works, but you could try viewing the purchased video in Quicktime Player, which might have a tiny bit less overhead than iTunes..
H.264 is a CPU intensive format to decode, there's not really any way around that.. GPU acceleration would help, but support for that is being added in Snow Leopard, which isn't compatible with PPC machines..