Just to make sure everybody involved is crystal clear RAM and application installation space are not the same thing.

With that aside.

I may be completely wrong here (I recall seeing this mentioned more than once, but I could perhaps have misunderstood or taken things out of context—somebody with a more intimate knowledge of OMAP please *****-slap me if I'm just talking out of my *** here) Manufacturing models with more or less RAM is a less trivial thing to do on an OMAP system than a regular laptop (one thing I am certain of, though, is that aftermarket expansion of that RAM is most certainly out of the question), as the RAM is manufactured into the SoC, rather than in a separate chip. So, to offer two models (say, one at 128MB and one at 256MB) it wouldn't simply be a matter of swapping out a RAM chip.

While I don't disagree that it would be a nice option, I don't really think it's super-appropriate for a mobile device right now. Personally, I'd rather just see Nokia put 512MB into the things with zero impact on either cost or battery life.