Not exactly: XP sp1 saw 4 Gb but used 3.5Gb, sp2 reports what it actually uses.
If you optimize your XP system so that it uses as little RAM as possible, you can cut down RAM use by as much as 150-200 Mb (taskbar icons: control panels for sound and graphics, automatic updaters for Java, Itunes, Acrobat etc. Services: Microsoft server, Themes support, infrared support etc. Others: complex language support, dynamic swap file size etc. Apps: remove Norton, enable Windows firewall and load a free antivirus)
Interestingly, removing Microsoft Office to install OpenOffice will increase other apps' speed (it cleans up several megabytes of registry space, which have to be kept loaded in RAM at all times, and run through every time an app has to use it).
By doing so, RAM use after boot can drop from 300 Mb to as little as 110 Mb and boot take less than 40 seconds. Running processes would also go from 40-50 down to 27 (increased responsiveness)
All in all, it would make FEAR run with very little swap (unnoticeable during gameplay) with 1Gb. No swap at all with 2Gb.
Even on my dual-core 2Gb gaming rig, doing so reduces loading time, crashing, increases system responsiveness and overall speed. Of course, I'm back to using Win2K gray interface, but I always felt like I would be seeing Barney arriving soon on my desktop with the Luna theme...
Why did I go to 2 Gb then? Simple, I had a single 1Gb RAM stick - and I wanted dual channel. It did give me a speed boost.