The answer really depends on how much and for what your system is used. Upgrading is easy and cost effective. RAM is used every time you open an application, download, play a game or simply turn on your computer. Additionally if you work with or plan to work with digital audio and video more ram is a necessity.
Novice User / Administrative
If you use your computer to send and receive email, do a little word processing, and are starting to surf the Web, you can get by with 64MB. However, you would benefit from going to at least 128MB of memory.
Basic User
If you are spending more time surfing the internet, sending and receiving email, and doing word processing along with other applications, you can get by with 128MB, but would benefit from going to 256MB.

Professional / Feel the need for Speed!
If you are running multiple business applications, want to play the newer video games and/or work with graphics, you can get by with 256MB, but your computer speed would benefit greatly by having 512MB.