My Hero generally has around 85MB of free memory, and it's more than enough to keep everything running smoothly. I don't really notice much of a slow down until about 25MB remaining or so, but you have to keep in mind that remaining memory isn't as crucial to keeping things running smooth as remaining CPU cycles.
Typically though, there is a fairly strong relation between amount of RAM used, and the amount of CPU cycles used, but a lot of apps can stay dormant in memory, taking up several MB of space, but using little to none of the CPU until they're brought to focus.
I'd say set it up so that it automatically kills the apps that are actually active in the background (except the ones you need of course) as well as any apps that sleep well but are of little use to you.
