More RAM needed?

Hi there, I have an iMac (May 2009) with 2.66 GHz Intel Core Duo, 2 GB 1067 MHz, DD3.
latterly the nefarious spinning wheel is appearing more and more often and I get Pageouts and swaps shortly after rebooting.
At the moment swap 1.6Gb/2Gb
Page outs 1.5M
I use a program that may use up to 1GB of ram, then I have Firefox and Thunderbird (big resource suckers) and Office for Mac (Word and/or Excel).
The performance of my computer seem to have been deteriorating in the last few months (still well usable, mind you), I wonder if it is the usage I make of it or there is something wrong with it (still under warranty).
If I need to expand the memory, can you give me some advice?
Thanks.
PS
I know this topic has been discussed over and over again, but I have been told by the power that be to open a new thread.

Thanks a lot for the info (and the link with the step-by-step illustration of how to do it...). Now all I need ot do id to find a seller in the UK that is not going to break the bank...
Besides, what memory size would you recommend? I wouldn't want to have an over spec machine with 8 Gb (OK, I know you can never have too much memory, but it doesn't come for free...).
Thanks again.

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