@pfdsotm:

Gotta say that the 512MB XP workstations at my workplace have been capable of doing the job, although yes, you must be mindful of resource-intensive applications. Symantec AV has been a major resource suck.
That said, we are now upgrading to new PCs/laptops with dual-cores and 4GB RAM (the extra 2GB was basically cost-free) so to future-proof ourselves for major software transitions to Windows 7, Office 2010, and Lotus Notes 8.5, and to budget for virtualization and multimedia projects.