to explain what happens when you run windows without enough memory...
When windows runs out of RAM (which is fast) it will swap the contents of it memory onto a file on your hard drive (which is a lot slower) to make room for what it needs in RAM, then when it needs the info it's put on the hard drive back into the RAM the computer needs to read the info back off the hard drive (slow) so it can use it again.
So although you can run windows with less than the recommended amount of RAM you will notice that the hard drive will be accessing all the time as the computer needs to swap stuff back and forth between the RAM and the hard drive, this has a serious detrimental effect on the overall speed of the computer.
Windows likes RAM and the more you throw at it the better it runs (upto about 3.5GB if you have a 32bit version of windows)