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If you're running Linux 1gig should be plenty. If you're running Windows 7 or Vista you might consider upgrading.
I put 2gigs in mine because I have Windows 7 on it to play around with (XBMC runs on Ubuntu 9.10)... that and I had the RAM laying around.
It's not a required upgrade at all.
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Some users say that you need 2 GB for smooth 1080p playback (such as Blu-ray rips). However, I've still got my 1 GB since I don't have any HD source material as of yet. There is a sample video out there that is 1080p called the "killa" sample I believe. I'm going to download it to test 1080p playback on my Revo with 1 GB to see how it works.
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Same experience. My Revo R3610 dual-boots into Windows 7 and XBMC Live. 1GB is plenty for smooth 1080p content under Live. Windows 7 GUI interface just by itself eats most of the memory.
Wireless network speed is OK for file transfers, but not for streaming. So far, the fastest way to move large files has been a 1TB USB drive (as in, disconnect, walk to the office, copy file locally, walk to the living room, connect).
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Another +1 for using 1GB. check the link in my signature if you're having trouble getting 1080p to play smoothly. I don't think the extra gig is going to make much of a difference for pure XBMC usage. Like the others have said, if you have something else in mind outside of XBMC, maybe, but for a strictly XBMC box, you're good to go with 1.
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I've been using mine with 1GB successfully for some time, but I thought I'd chime in here to say that a while back one of the XBMC devs (can't remember who) claimed that 2GB might solve some of the green-screen/blockiness issues that occur when starting up a movie. FWIW, that issue doesn't occur on the Windows (XP) side for me with MPC-HC or the DSPlayer mod, and I don't consider it bothersome enough to feel the need to pay the few extra bucks for another gig or crack open my Revo to do the upgrade.
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motd2k
Team-XBMC Developer
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A few drivers ago 1080p VDPAU playback required 512MB dedicating to the iGPU - I noticed that VDPAU can now use system memory instead of the framebuffer so I guess this requirement no longer applies.
It'd be the first thing i'd suggest you upgrade if you experience any issues though.