AE could certainly use a LOT more RAM. I currently have 24g's, and it sucks it up pretty quickly. Also, you are using the h.264 codec, a codec that is NOT ideal for AE. Run a search for all the specs here in the cow, but I'd highly recommend converting the codec to something a little more native to AE, such as an avi. (Not sure what codecs you have installed, and I'm on a Mac where everything gets converted to ProRez422.)
With regard to the slow rendering: if you have multi-processing enabled, turn it off. As Tim said, you don't have anywhere near enough RAM to feed multiple cores. Multiprocessing launches multiple instances of the renderer, each running on its own core, and each instance requires its own RAM -- at least 2GB, and preferably 3 to 4 GB per instance. Of course, the operating system and any other open applications require their own RAM as well. I'd equip a quad-core system with at least 16GB of RAM.
Also, I agree with Tim about h264 -- rendering directly to h264 isn't a good workflow. h264 really benefits from multipass encoding, so it's better to render to a lossless intermediate (like Animation or PNG codec Quicktime movies) and then compress that to h264.
As for the length of your RAM previews, that depends on a few factors: your memory preferences, the resolution of your comp, the color depth of your comp, your free RAM, and your version of After Effects. AE CS3 is 32-bit only, so it can grab a maximum of 4 GB of RAM for the application, all layer and image caches, and RAM preview (you can adjust this allocation in your memory preferences). CS5 is 64-bit, so it can access all the RAM in your system, allowing you much longer RAM previews (if you upgrade your memory).
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