By the way, it's actually kind of hard to get a good read for memory usage is OS X, because it will almost always allocate all your RAM (except for a 3 or 4 meg safety net) with various file caches etc. However, at the moment, I've:
1) got Mail app open
2) got Safari open (doing this)
3) stripping DRM off iTunes music and converting to MP3's w/ JHymn
4) got a Terminal open running top
5) running Stickies
6) running Eclipse (pretty massive Java IDE)
7) always running QuickSilver (baddest-ass mac app ever, by the way)
8) running FrontBase (database)
9) running Apache, and all other misc services

My memory stats are:
PhysMem: 108M wired, 403M active, 448M inactive, 959M used, 64.3M free

So that's 108M wired, which means it can't be moved in memory, 403M active which means it's been touched relatively recently, and 448M inactive, which means it's just chilling and is a good swap candidate. So what you REALLY care about is wired + active. Used = wired + active + inactive, but inactive is really misleading since it's almost always going to roughly equal total - (wired + active).

So basically I have a pretty heavy load going right now and I'm right about at the 512M mark, so I would think 512M should be sufficient. 768M is probably a little bit better sweet spot for a REALLY used dev box, but they don't offer that config. So yeah, I would go 512.