Amount of RAM is more important than processor speed.
Definitely.
Most people's machines spend most of their time pretty close to idle on CPU (other than brief spikes - even gaming these days is mostly GPU bound - not CPU, which is identical between all MBA spec).
This has been true for at least the past 18 years I've been working in the industry.
My advice has always been, both in PC land and on the Mac - get as much RAM as you can reasonably afford. Typically this is 2x the regularly shipping amount. E.g., if machines are shipping with 4 gigs base, go for 8. if it means dropping a speed grade on CPU then do so.
You will not notice the difference betwen say, 1.7Ghz and 1.9Ghz unless under very specific circumstances.
You WILL notice the difference in responsiveness between 4GB and 8GB in daily use, and having half the memory will eventually render your machine pretty much unusable, when software or the data files you are working with outgrow the RAM.
Dropping a speed grade on CPU won't.
To the OP:
Given the choice between 1 yr warranty and 8 GB or 3 year warranty and 4 GB (non-upgradable), i'd take the 1 year warranty every time (and did so, with my MBP).
Sure, if the machine dies after 12 months, you're boned.
But in my experience (18 years in the IT industry both PC repair and later network stuff) most machines that die, either die very early (manufacturing defect), or well after the warranty period or due to stuff not covered by warranty anyway (i.e., drop, liquid ingress, etc). The most common failure is storage, which is replaceable. I.e., it's a chance; you'll most likely NOT have an early failure, if it hasn't failed within the first couple of months.
However, going for HALF the RAM, and having no upgrade path, you WILL reduce the usable life of the machine. There's no "maybe" about it. It's a certainty, and has been the case with every machine I've owned.
But - that's a calculated risk on my part. If you'd prefer the safety of knowing your machine is covered, and can accept that you WILL need to upgrade sooner, then the longer warranty may be attractive.