This question comes up from time to time, so to put the feet to the fire, here is the same GPU testing with 256 MB, 512 MB, and 1 GB worth of memory to see how it affects performance. 512 MB is still the sweet spot after all this time. 1 GB gives you very little unless you plan to run at 1920x resolution - and most games would perform poorly at such high res anyway on a single card that it is almost worthless. 256 MB doesn't really cut it anymore either, even at low resolutions since games like to fling large textures these days.
ANyway, here are the goods:
http://en.expreview.com/?p=159
-S
PS. Here is the 3dmark graph:
