What applications do you run on the system?
If you are using office type applications, (ie word/excel/powerpoint/outlook) then you won't see much benefit from over 512Mb, even with reasonably heavy multitasking.
If however you are into serious video/graphics/sound editing, multimedia etc, then 1Gb will be beneficial.
I would definitely upgrade though from 128Mb to something. My system has 384Mb and has 200Mb free at startup, so the system uses 128Mb for its own use, leaving the rest for applications and data.
Jo9hn