I'd defintately get another half gig of RAM. 1.5gb is OK but 2 is better.
From your description it sounds like RAM usage is more of a problem than how much you have. When completed Windows start up what else is running on your system?
My advice would be to shut down everything else that's running including background tasks and then use a memory optimisation application to clean up any leaks before running SHIII.
Take a look at the size of your swap file and see whether you can set it so you have a 2gb swap which may help out if you really can't do without the background tasks.
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