It isn't inaccurate, but it is perhaps not showing the counters you're most interested in?
Have you checked the memory counters available in Performance Monitor? (and read their descriptions?)
In addition, be aware that minimizing an application causes the window manager to flush not-recently-touched pages to the pagefile. I.e. this will reduce the amount of physical memory used by the app (currently), but gives you a false indication if you're more interested in peak usage. By nature it will be hard to pinpoint at a given time just how much physical memory an application uses (if the process allocates a 10MB memory block at initialization and doesn't touch it for quite a while, are you really going to worry about that block being paged out?).
IMO the way to go is to look at how many pages are being read from the pagefile per second. If that counter reaches a certain threshold then you need more memory.
(I'm sorry about that -- the only useful thing in my post is that bit about reading the counter descriptions found in Performance Monitor -- Perfmon has been part of Windows NT since the very beginning, so it is THE tool to use -- incidentally NT 3.1's perfmon didn't look all that different...)