Your RAM is okay. Linux is generally good in boxes with less than average RAM; it is often recommended instead of Mac OS X on older G3s.
It's your processing speed that might be letting you down a bit. If you notice your system being slow at a particular time, try "ps -A" on the command line to find whether makewhatis or updatedb are running. If you've never used the locate command, you don't need to run updatedb. You will find these processes listed in /etc/cron.daily , similarly for weekly, and monthly. For the ones you don't want/need, you can just "chmod -x" them as root. Use the man command to find out what they each do.
Regards,
Samsara
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