Your 3D gaming performance depends on your system RAM, yes, but it depends a lot more on your video card. You could have 1 gig of the best ram money can buy, but if you have a 4meg POS video card, your performance will stink.
I'll use my old system as an example. I had (still have...rusting in closet) a Dell. This was way before I got into "computers" as a "geek". It had 128mb of PC100 memory. I was using (gasp) the onboard video, which has 4 meg of ram. I bought a Voodoo 3000 PCI card. The difference was like night and day.
Then, I bought another 128mb of ram, for a total of 256mb system ram. Honestly, it was noticeably smoother.
With my new system I have a 32mb DDR vidcard, which is by far my favorite component in the system. It just rocks.
So, my advice, if you are looking to upgrade is that as long as you currently have at least 128mb of system ram, is to get a better videocard first. With today's games, I feel that 128 mb is the absolute minimum you should have.
So, for GAMING, Would 512mb make a noticeable differnce from 256mb? Hmm, I dunno. Maybe. Would you see a difference? I don't think so. But, there's no such thing as too much ram, and the price has dropped considerably. It all depends on your current system.