256 definately, especially if you use Photoshop or any sort of CAD tools.
I have 128MB, and I'm buying 128MB as soon as I have my next pay cheque.
When I'm playing Diablo2 it thrashes. That's not exaclty Quake3, UT, SOF etc. Just Diablo.
Now I'm running ICQ, Apollo (Mp3 player), and it is a Diablo2 TCP/IP server, but still that's not exactly heavy duty multitasking and my hard drive goes nuts.