Some of you mentioned Windows 7 / IE8 is less memory intensive, but not for me. I am running Windows 7, IE 8 on a Fujitsu Lifebook T4410 with 2 Gb RAM.
From a fresh boot, I execute a single instance of IE with only one tab being used and access my gmail account: 201, 438 K
I then execute a second instance of IE with only one tab being used and access CNN.com: 196, 403 K
Open a copy of MS Word, ITunes my
Standby Memory is about 450 MB
Free Memory is ranges between 3 - 5 MB.
I have run virus scans, malware protection, Windows patches are current and do not see any unfamiliar processes running in tskmgr.