I'm sure it is possible to tweak the OS to run much smoother than by default settings, but the average computer user, which is the ones that asks me for help every once in a while don't have skills to do that. So I recommend at least 512 MB RAM.
To me it happens all the time that the PC is running very slow because of insufficient memory, but the last 8-9 months I've installed loads of software and tested different stuff, and my harddrives are almost full, so I need a big cleanup soon...
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