When I first got my MacBook it had 512mb of RAM in it. This lets you run about 2 applications at once (maximum) and if you want to load 5000 photos into iPhoto, you can forget it - it just crashes.
I've since upgraded to 2 gig and never hit the memory limit. It's easy to consume over 1 gig though so 2 gig is highly recommended, especially for an operating system that is meant for media like OS X is.
And you have to buy the memory in pairs so it's probably better to upgrade when you buy the machine unless you want 2x256mb chips sitting around.