I have a PowerBook with 1GB, and I have been watching the prices of RAM so that I can upgraded to 2GB. Lets take a look at what I am running at this moment: Finder, iCal, MoonDock, System Preferences, several Terminal sessions, LaunchBar, Mail, SpamSieve, Adium, NetNewsWire, OmniOutliner, BBEdit, Safari, Excel with several large spread sheets, FireFox, iTunes. I also have a bunch of stuff running in the background, Apache, PostgreSQL, MySQL, various utilities, etc.
1GB is actually enough for all of this to run comfortably, until I have a need to fire up Virtual PC or run a Mac OS Classic App.
For the typical home user running Mail, Safari and iTunes, I think 256MB is plenty.