Memory does not make your processor faster, having more memory will allow you to store more information in system memory so that you do not need to access the hard drive as often, which will make your computer more responsive, but if you have a slow processor there is no amount of memory in the world that will make it 'fast'. What it comes down to is knowing how much memory you need/use, and how much you can cram in your system. Keep in mind also that there are some 'magic numbers' when it comes to your OS and the amount of Ram you have. Pre Windows 2K (think win95/98/ME) Windows would stop automatically using 'virtual memory' (or your hard disk as system ram) if you had 512MB or more, so you would want 512MB or more to have the system run smooth. With Win2K and XP that number went up to 1GB of system ram, and then Vista/7 32bit it is 2GB and 64bit it is 4GB. If you are using more system ram than that then it will tap into virtual memory if needed, but it will not use that virtual memory by default. The computer will run on less ram than that just fine, but that is the point at which (for 90% of users out there at least) there is little to no performance gain to adding any more system memory. The only exception to this is if you are using programs that use a ton of system memory like audio/video editing, some video games, and many high end database programs. Keep in mind too that there are system limitations on the motherboard as to how much ram you can physically install (for systems of that era it is generally 1-2GB per memory slot, likely a max of 4GB for the P4, and 6GB for the AMD, but I would need to know your mobo model to know for sure).
Personally, as a power user who does a bit of gaming and HD video editing I have 16GB of ram. I have never seen my memory usage go much above 3.5GB when gaming, and most video projects so far use between 8-12GB (though I did have one so far that ate all of my system memory and ~6GB of my virtual memory lol), so I think it would be safe to say that something around 3-4GB of total memory is a good place to be, but I think you will find that your CPU will simply be slow for many of today's programs, and that is where your bottleneck will be.
As far as which is faster; It is a general rule of thumb the AMD chips beat Intel hands down during the Pentium 4 era. But if you had a fast (all be it inefficient) 3.2GHz late gen Pentium 4 vs a slow 2GHz AMD then the Pentium would be the way to go. But like others said, unless we know what Pentium 4 it is there is no real way to know. Pentium 4 was a brand name for some 6 years, so it covers a wide range from absolute crap to nearly decent.