I do have 512 Mb Ram.
I do CAD, 3D modeling and photo editing and I often reach my memory limit....
At work I have 256Mb ram and i do use the same software...there is a huge difference.
For example, Mechanical Desktop, Pro/Engineer and 3D studio max3 can take up to 250Mb of ram each and Corel PhotoPain 9 can take up to 300-350 Mb or ram (1200 dpi letter format images in 32 bit color)
BUT, if you dont use such applications, maybe you will notice a small difference in win98 (in Winnt you would notice a much more significant difference)
Good luck