I've read of Win7 being run with even less RAM (as an experiment). Can't recall the URL though.
However, I do remember the key is turn off unnecessary services and a number of the new fancy, WOW gimmicks.
I did a test run with Win7 on 1.5 GB ==> very nice and very pretty.
BUT... you knew that was coming
Standard install, added Firefox... and 3 tabs in FF resulted in ~ 1 GB in use.
Not enough free RAM for my normal usage... back to XP and dreaming of a leet machine with 6 GB of DDR3