The easiest way to determine if you need more memory is to open Activity Monitor, go to the Monitor menu, select Dock Icon -> Show Memory Usage. This will give you a pie chart in your dock showing how memory is being used.
Red is Wired (locked down memory). This memory is never paged out. You can ignore it.
Yellow is Active memory. This is memory that is being used by programs right now and rarely goes over half your total memory. If you find that this segment of memory is constantly taking up a majority of your memory usage, you may need more RAM.
Blue is Inactive memory. This is memory that was recently used, but hasn't been removed from memory yet (so if an application used it, it would become active without having to read from the hard drive). Inactive memory is usually around the same size or smaller than Active memory. If you have very little Inactive memory, you may need more RAM.
Green is Free memory. This is memory that hasn't been claimed by anything currently running ever. This is a little tricker, if this value is a very small fraction of your overall memory (around 1% of total memory) then you may need more RAM. If this is the case, then you should watch the page in/page out counts under Disk Activity. More important than the overall number of page ins & page outs is probably the rate of paging, as if you see LOTS of page ins & page outs per second, then you likely need more RAM.
You will get page outs. This is simply because of how the system works. More important is how often your system pages. Lots of page ins typically represents that your system has had to shuffle code in/out from/to disk because there isn't enough memory. Lots of page outs represents lots of changes committed to disk (which can also be because of files being modified, which wouldn't have much to do with you not having enough memory).
Overall, I doubt that you need more RAM. But if you decide you do, this should give you some idea how to determine if and when (and perhaps how much).