I am running two xenforo and a vb 4.2 plus a wp and some other random sandbox installed on one gig one core and its doing just fine, I suppose it depends on how many users you have , but you should be able to upgrade the memory when its needed.
Your right. Sometimes virtual or cloud dedicated carry them but it's not common. Three is kind of the perfect middle though if you can't decide on 2 or 4 . I really never go down to those levels, however, I was running a dev server with four a few months ago and it was sooo slow.
To be honest, I am not sure why people buy 1-4 GB dedicated machines when a good shared hosting provider gives you a lot more for much less.
I use Hetzner - a dedicated server with a Xeon E1245 quad core cpu, 16gb of ecc ram, 2 x 3tb enterprise-class hard drives (in raid 1) and 10tb of bandwidth costs 69 euros a month. They have other servers as cheap as 49 euros: http://www.hetzner.de/en/hosting/produktmatrix/rootserver-produktmatrix-ex/ If you want a control panel, cPanel is an extra 30 euros a month, or Plesk costs about 8 euros per month. They're amazingly good value, but note that the servers are unmanaged - beyond replacement of faulty hardware, you're pretty much on your own! I've only been with them a couple of months, so I'm not in a position to judge their reliability or support, but I'm very happy with the server itself.
Asking the kind of questions you are, I assume you will need support with your hosting. Am I right? If that is the case, I would avoid really cheap servers as they will come with bad support. Some places to try:
It does sound odd, since memory is closely tied to CPU. So it makes sense to keep their size a power of two -- as multiple modules can be packed requiring minimum logic in order to switch between them (i.e., only a few bits from the end need checked (binary representation is 1000...0000 regardless of size)).
As an aside, keep in mind that the system will typically reserve around 200MB - 1GB for itself (4GB max for 32-bit).