XP with 512mb hardly ever uses the paging file so you won't cut down on hard disk accesses. I s'pose if you're doing video editing it might help - but not many people do that on a laptop...
IMHO unless you have some really specific reason for needing scads of memory (apart from the gee-whiz factor) suggest you stick with 512mb 'cos increasing it WILL increase your power consumption (and make everything run warmer).
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