I have a A2000 with the same GVP 040 @ 33Mhz Geforce and Picasso II but with Megachip. It runs fine, simular to my A4000d. Only diff is that screen and windows/icons render slower. Opening Prefs also shows that the SCSI throughput of the Geforce is slower than a High speed CF Card on A4000D IDE.
It's quite usable but you will notice the difference from your A1200. Especially if your A1200 has a high speed CF Card.
That's pretty slow SCSI. It might be time for a GuruROM. Peter Keunecke's icon.library should help with icon speed:
http://aminet.net/util/libs/IconLib_46.4.lha
Using HappyEnv will save you memory but will slow down the machine further.
I don't notice any slow down here but I get 30MB/s on my CSMK3 hard drive

. There shouldn't be much overhead the way HappyEnv is implemented (file system) but variables are read from the hard driver the first time they are accessed. Booting is generally faster though as all the variables are not copied from hard drive to ram on startup.