In general, the more memory the better. You're right about SQL Server standard. It can only access 2GB.
Hardware optimization is not my strong. You might want to check to see if your server vendor has a whitepaper regarding SQL Server. I know that Compaq does.
Have you checked-out the whitepapers that Microsoft has (
www.microsoft.com/sql)? Also, the book SQL Server 2000 Performance Tuning Technical References addresses hardware optimization.
You find that you'll get the best resutlts with a mixture of RAM and disk subsystem improvments.
>> I read somewhere that you should try to have enough RAM to hold your largest table.
I have never heard of this.
-Mike