512mb is fine. If you ever need more than that, chances are your computer will need to be replaced anyway.
I can't recommend this link enough: http://www.supercoupon.com/Coupons/Computer/Dell_Home%3A_%24750_off_select_Inspiron_purchases_%241499_or_more/
To use the coupon you need to click on one of the links from the site to Dell's site. I just bought an Inspiron 6000 for $930 with lots of extras and there is NO WAY anyone can beat that price anywhere. Plus, I got a 2 yr at-home service warranty with accident coverage in case i drop it or spill something on it. Without that service warranty the price would have been roughly $700.
I thought about my laptop purchase for a while and came to the conclusion that it was best to get the most for your money and get a warranty than to get a "more reliable" laptop from IBM with less features and less of a warranty. If my laptop turns out not to be quite as hardcore and well-built as the IBM, I won't mind because it has a warranty in case anything breaks. I'll take that over reputation any day.