If you only use your PC for web browsing, emails, music etc you probably don't need much more than 512mb. I have 1gb in my PC only because I do a lot of audio and video processing, use PhotoShop quite a bit and basically a few other things which need a lot of memory.

You can check how much memory you are using by going into task manager, so if you run all of the programs that you generally run and look at that it will tell you how much memory you're using. If it looks to be close to maximum then perhaps consider more RAM, otherwise for just an increase in speed I think a processor upgrade would probably make a more noticeable change.