Nah x10 is as smooth as it gets, only slight lag is that timescape takes a couple of seconds to load up, but this should be streamlined and sped up with the 2.1 upgrade
The ram is less than some of the other high class models, but remember this is a 1ghz processor on a minimalist os built for awesomeness.
The most station I've given it is psx4droid and it copes well on all games expected, if the ram is the only thing stopping you buying just get it, my girlfriend has the desire and I would still have this any day, it has more internal memory for one which is awesome for apps