I would be a bit worried about the fact that it is "getting sluggish". This means that it used to work just fine in the 512 MB it has. So, something has changed. Bumping up to 1GB will help with the performance, as all of the above posters have said, but perhaps it would also be useful to try to find out what is slowing it down.
As regular readers of this forum will know, I have a regular sequence of steps I prescribe for Macs that are slowing down, as a first cut at finding out what is wrong. You may wish to consider them? Here they are:
First, check that your processor is running full speed. Go to Preferences, Energy Saver, Options and look at the drop box down near the bottom called Processor Performance. If it is not set to "Highest", set it to that right away. This maximizes performance, but for notebooks, it may run down the battery faster.
Next, download OnyX and run the complete set of clean up and maintenance scripts and then try again. Get OnyX at:
http://www.titanium.free.fr/pgs/english.html
Finally, you may wish to check that you have enough free space on your hard drive. Highlight the Macintosh HD icon on your desktop, CTL-click it and select Get Info from the resulting menu. Make sure you have a reasonable amount of space left. If not, a little spring cleaning may be in order.
There are two excellent apps for showing where all of your hard disk space has gone, Disk Inventory X and WhatSize. Get them at:
Disk Inventory X:
http://www.derlien.com
WhatSize:
http://www.id-design.com/software/whatsize
Both do a great job at letting you zero in on your largest disk space consumers, so that you can hunt down any rogue files.
Do the OnyX thing first, then restart and try out one or both of the above tools. By the way, all three are freeware!