In a recent experiment, I took the famous Presario 700 with 256 megs of RAM and installed just the core gnome environment. You can do this by running:
sudo apt-get install gnome-core
After you have this installed, you can run GNOME by the "gnome-session" command in .xinitrc or by selecting the GNOME session in GDM. This provides all the basics that xfce4 provides. If your installing from the command line only install of Ubuntu, you may have to install some other components, but all the dependencies should be met by this metapackage. You may have to install the xorg package.
I had some interesting results in memory usage. Here is the results of free on a fresh reboot using GDM to log into the X session:
GNOME Session: 60 megs
XFCE4 Session: 58 megs
So GNOME core uses just about the same amount of RAM as XFCE4! Very interesting results.
UPDATE: I received an old Dell Latitude at work, and figured this would be perfect for my article. After some playing around, I had to use the following to get the basic desktop up:
sudo apt-get install xorg xinit gnome-core
Then I installed some themes and whatnot to make my desktop a bit more attractive:
sudo apt-get install gnome-themes gnome-themes-ubuntu ubuntu-artwork
UPDATE: The memory tests were done on Ubuntu 9.04. I ran the same tests on Ubuntu 9.10, and it appears as if GNOME has somehow picked up some more bulk. GNOME is using about 10 to 15 more megs of RAM than XFCE4. Still not a lot, but could mean all the difference if your running lean. Also, performance wise, XFCE4 seems to be a tad faster, especially on machines using CPU scaling.