I run under VMware Server from a Gentoo Host and a Ubuntu Client. I initially allocated 256 MB, and things ran okay (4 users). I've upped it to 512 MB, and things are better.
Code:
root@mail:~# free
total used free shared buffers cached
Mem: 515884 484640 31244 0 3908 71272
-/+ buffers/cache: 409460 106424
Swap: 746980 142628 604352
Gerald