I'd say 256MB is the minimum for a system that would run "well." 384MB or 512MB would be much better, as OS X's virtual memory system does swap out to disk rather frequently in "low memory" situations, and laptop drive architectures are not nearly as fast as desktops'.
I've got 768MB in my DP G4 800. And the only reason I ever boot into OS 9 is to use my scanner--I've converted entirely to OS X otherwise (and scanner drivers are on the way).
Classic works quite well in 10.1 and apps are coming all the time. The sooner you can happily move to OS X the better. OS 9 has reached the end of its life, bascially. There's no innovation there.