Adding to hsyong's comments on ram : My personal experience using various Androids, I 'd say for present modern range of Androids and its available apps, 512 MB is the minimum. But then it is always good to have more memory. The amount of RAM is very obvious when you are using a graphic intensive app , example UI like spb Shell 3d.
If one does not compare , one will not realize how the additional ram will help. I am a gadget hobbyist and I have several current Androids to test and experiment and all using the same type and number of apps. So my comparsion studies I'd say is fairly accurate. I do not make statements without supporting personal experience
My Motorola Atriz has 1 GB ram - spbShell 3d on it is extremely seamlessly smooth and slick. There is absolutely no stutter or lag experience
My Incredible S with 768 MB ram performs eqiually well BUT there are at certainn times some slight lag - not very noticeable but I can feel it. Stutter issues none
The Xperia Arc with 512 MB ram - slight stutter and ocassional lag is there. Especially when spbshell is first loaded up is noticeably slower by 2-3 secs and first time you access the apps from Menu - it stutters slightly and takes up to1-2 secs to fully display all the apps. This is virtually unnoticeable in both HIS and Atrix. I always attribute this to the lower ram available on the Arc. Casual users might not be bother with this and accept it as a norm but if compared it with others with higher ram, the differences is very obvious
But than again, most users will not be too overly concerned with such issues . It does mot really affect the overall operation of the phone. It is only guys like me who has the opportunity to have other phones on hand to compare - it becomes an academic exercise in comparison
Different Owner will have different expectation on this Arc.