Hey Mike, I think you are confusing the recommended RAM with how much RAM an application actually uses. The recommended RAM already factors in how much RAM the operating system is going to be using. So itunes will recommend 512MB to give room for the operating system and the application. I suppose this is to keep the users from having to add it up themselves.
So you should be fine with 1 gig, but I would recommend 2 gig if you can afford it. This is to help multitasking and such. Or you can always upgrade later to 2 gig if you decide you need it.
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