A large Photoshop or Premiere Pro project easily uses 2 gigs, and if you have both open side by side, you can easily hit 4 gigs.
In other words, there is no good reason to advocate for 2GB of ram over 4GB.
Sure there is. Alot of people don't need to play with photoshop, let alone two projects at the same time.
Reasons for 2GB: it's twice as cheap as 4GB and winXP has a 2GB virtual adress space per application limit anyway.
Which means any single application in winXP will use less, or much less, than 2GB of RAM when it hits the limit.
Worse, winXP cannot use more than around ~3.2 GB of RAM even if you have many heavy apps running. This 3GB limit is also what you will run into if you hack the 2GB limit out of XP and you can flag an .exe >2GB aware and you can live with a crash prone PC.
So we have 2 valid options:
1. 2GB RAM if you upgrade a PC. Likely to be limited to a 32bit OS here, because of 32bit drivers for the stuff you kept.
You may also want to keep winXP for max compatibility, so you can keep running your older games and applications you may have installed.
2. 4GB RAM if you buy or build a completely new rig. Get a high-end machine with 64bit Vista installed. You may want to replace the videocard with something good.
3. 32bit Vista is a waste of time. Stick with winXP or get a new rig with 64.