It all boils down to what you use your computer for.
You mentioned 2GB of RAM being plenty for XP- depends on usage. Disable the page file and I can EASILY max out that RAM. After a clean install with all updates and drivers (SP3 included) XP idles at around 600-700MB memory usage. Far less than Vista, and even less (though not by much) than 7 Ultimate x64.
However, start firing up programs such as Steam, I.S. (which is near a must for anybody on XP still), etc and that 2GB really begins to look small.
I used this exact process to show my buddy how 2GB isn't that much anymore. He was absolutely convinced that 2GB of RAM was more than sufficient. I told him it wasn't. He doesn't do a lot of high res gaming- the games he does play are mostly old-school by today's standards (WoW, LotR: BFME and BFME II, C&C 3, etc). He was convinced 2GB was plenty.
He doesn't quite understand the concept of a pagefile, or atleast he didn't. So, I disabled his page file and restarted the system. Fired up just fine.
He had IE open with a bunch of tabs, minimized it and went to fire up WoW and got the notorious prompt informing him he was low on memory and needed to close some applications.
I then explained to him how the pagefile works, and how more RAM and no pagefile is always preferred for optimal performance.
You don't believe me? Do like wise. Disable your page file and carry on using your rig. Let's see how long that 2GB lasts you.