Before you blow away Ubuntu or spend money on RAM, I would disable
uneccessary services. By default, Ubuntu installs many unneeded services &
modules; bluetooth, raid, ipv6, ppp & .... Anything you can turn off will
save RAM memory.

The utility "sysv-rc-conf" and "Bootup Manager (BUM)" can help!

This thread discusses the services in detail.
<http://ubuntuforums.org/showthread.php?t=89491>

Some services you may have to blacklist.

I have a Dell PII-266Mhz Laptop with 144Mhz of ram running Xubuntu and
using about 40MB of ram at idle.

I also have a Dell CPx Pentium III 500 Mhz w/256MB of Ram running Ubuntu
and at idle using about 110MB or RAM.

On these older machines with 256MB or less of RAM, the swap file should be
set to 2 times the total RAM installed.

Also install prelink to speed up the loading of many applications.