How much ram EQ takes up is very dependent upon your graphic settings selected at the main menu. If you are trying to play with all models, high texture quality, animations, dynamic lighting, sound, ect...all at the same time, then EQ takes about 750MB of ram per box depending on what zone you are in. This can be dramatically scaled down by simply reducing the number of models.
Another option is to increase your pagefile in windows. I have a system similar to yours with 2GB of ram then I have adjusted my pagefile to be 2GB as well giving me a total of 4GB of "ram".
Adding more ram would be the more performance route, but it really only adjusts load/zone times of the additional boxes. Once you are in a zone with all of them, the speed difference is negligable.
I run with just high elf male/female, dwarf male, and horses/elementals, resolution at 1280x1024, texture quality at high, everything else turned off takes only 91MB of ram sitting in high hold pass.
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