are you running XP? cos XP doesn't need much RAM
if your system only uses 1GB at most, i'm guessing you are running XP. i've used Vista for a year and upgraded the RAM from the stock 1GB to 3 GB. when it was at 1GB, the idle system would take around 500-700MB. not much room for the more intensive programs is there? Photoshop and games didn't handle too well. Now, at 3 GB, the idle system actually uses 1GB (and it's a hell of a lot faster too).
the point is, Windows XP doesn't really need that much RAM. it's Vista. since so many people upgraded to Vista, they announced "Upgrade your RAM!" and that's probably what you've been hearing.
if you actually are using Vista or 7, then you've optimised your system really well.