Are you talking about the windows version? iTunes on my iMac is only using 32mb of ram after running all day. I only have a 10gb library, and a few playlists, but I dont know if that really effects the ram usage much.
I can tell you that on my last revision mac mini g4 that movies play a lot better in quicktime than they do through iTunes. As to his specific hang up not sure, maybe he doesn't like looking at all the features he doesn't need?
finalized the 3G?