To put 512MB of RAM in perspective, that was how much I upgraded my machine to after installing Windows 2000 (upgrading from Windows NT 4, where 32MB was a bit cramped, 64MB was nicer and 256MB was very comfortable). Both of the before and after systems:

• Were fully preemptive multitasking 32-bit systems.
• Had memory protection.
• Had a TCP/IP stack and connected to the Internet, with web, email, and IM (and usenet!) apps all running happily.
• Ran a GUI on a monitor with a resolution of 1600x1200.
• Could happily run MS Office and StarOffice.
• Ran half a dozen applications at the same time.
• Ran 3D games.
• Rarely needed to swap.

I used to run GEM and Windows 3 (not at the same time) on a machine with 640KB of RAM, but that was definitely cramped. The main reason that 512MB is no longer enough is that the web has become a bloated monstrosity. Web pages are now on average larger than the original Doom, yet have a user experience no better than 10KB of text with light formatting.