More RAM is always a good thing.
I have been running on a Rev. A 17" G4PB for a while now, couple of years or so and have not felt the need for more RAM than the 1GB I have installed.
I think your law of diminishing returns is a good analogy.
More than half a gig is good.
A Gig is definitely good enough.
2 Gig is cool!
My other machine is a Dual G5 2Ghz with 4GB of Ram!!
