Originally posted by linoleum
Some of that 700 is cache and stuff. To paraphrase what I heard somewhere else "Unused RAM is wasted RAM". So no matter how much RAM you have, it's always going to try to use everything for something. I think.
You have the right idea.

As for needing 512 megs--you'd need a LOT of extra crap installed that you don't need. Even bloating the install to install everything shouldn't slow it this much.

Most of my machines have 256 megs. I've run plenty on 128 with no problems, though.