With Activity Monitor and the Finder open, and, a few background apps (Remote Buddy, Proxi, and PTHPasteboard). I had just closed all other apps: Mail, FireFox, iTunes, PandoraBoy, Adium, iCal, probably a few others.

With 3GB Physical RAM in this system, I was left with 750MB free:

This, is no good.

Update (12/29/09): I finally googled this, no idea why I waited so long. Anyway, Mac OS X: Reading system memory usage in Activity Monitor.