I've got 512 pc2700. After running a monitoring program that came with my mobo it seems that i'm using about 40% of physical memory before I run any games or other apps.
Yes, are you closing all background applications before gaming? The memory usage with no active programs should be no greater than a few percent (generally speaking, it should be around 0-1%)
Again, is there anything running in the background that you don't know about?
I've run a spyware program that got rid of 305 objects - whatever they are. IRC and ICQ are usually running most of the time, other than that i'm not sure how to check exactly what's running and whether I need iit or not.
My best advice would be to disable programs you don't use/don't know what they are
Start > Run > msconfig > Startup (tab)
Uncheck what you don't want to boot up -- be careful, though. If you have any programs such as AV when you boot up, I'd double check the name of the .exe on google, that way you can know for sure what you're disabling on bootup.
No, that is not necessarily high.
As I'm typing this I'm using 258MB. I have been just reading some news sites, IM programs open and several other small programs working in the background (LCD display/Remote/motherboardmonitor etc).