Looking at memory via Activity Monitor
Although I do have a 1.8GHz G5, I still only have 256MB of RAM. And with that I can run Photoshop, InDesign, skEdit, Mail, NetNewsWire, Safari, iTunes, Firefox, Adium, and who knows what else at the same time. It might be a little slow, but it certainly is doable.
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I went to Apple Soho earlier this afternoon for the purpose of determining what a safe memory upgrade should be when I am ready to purchase in the next few months. I cannot say that I experienced a shocking revelation, but it qualified as a very pleasant surprise.
I was using a 12" PB with 1.256 MB of RAM. A total of 21 applications were opened and Activity Monitor stated that there was still another 204 MB of RAM available. Among the open apps were five in the iLife suite, plus AOL, Safari, Mail, Automator, Spotlight, Word, Excel, Pages, Sherlock, Calculator and Dictionary.
In practicality, the demands on my laptop would be a mere fraction of what I outlined ... however, just to stay ahead of the curve for the 4-5 years I expect to own it, minimum memory will likely be 768 (1 gig if I feel like splurging).