Postgres is far less resource intensive than Oracle. In fact, today's Oracle is far more resource intensive than last year's model, just another reason not to use it, IMO, unless you need all the functionality that piggishness supposedly makes possible.
Your 128MB machine will work fine, even after you start up the Postmaster with a "-B 1000" switch (assuming you've compiled PG with a 16KB datablock size), causing it to use 16 MB for its shared buffer pool.
I do my OpenACS development work on two machines, a small tower and a laptop, each with 128MB, each running X and gobs of others stuff I find useful on a development machine, and swapping's a very, very rare event.
