Guerrilla Games' Killzone presentation
on page 9 or 10 gives a nice breakdown of video memory usage.
Essentially all that memory is used extensively in is texture data and render targets. Basically, if you want high resolution textures, this eats into your VRAM heavily. If you want nice post-processing effects and antialiasing, this also eats into your memory. So what'll happen if you run out of video memory? Same thing with main memory: your performance starts to suffer. However, video game developers are opting more for memory efficient techniques so I wouldn't worry about this too much. If anything, VRAM isn't really so much important as your raw GPU compute performance.
But hey, at least you didn't fall into the trap that you have two 2GB cards and that meant you have 4GB.