Forget eye candy on a stock 1200. Having a large harddrive can even be a bigger strain on your memory resources but I guess it will work.
What can it do? A stock 1200 is to be considered as a year 1992 computer. So it can do 1992 computer things. That is it. Everything it can do more is mainly because an amiga is a very good computer.
So look around for old software on floppy. It will most likely run on your 1200. It will do nothing more unless you enhance it to greater levels. It will never be a 2006 computer. Get a PC if you want that. Retro computing isn't about playing DivX.