The simple answer is yes.
Assuming you are running Windows XP on the laptop, chances are that after a few applications have been installed (typical installations) the 256MB will not be enough. This is due to the high memory consumption of the operating system that leaves little to the applications.
It isn't that your machine won't work. The reason of deteriorated performance is that the operating system will frequently swap applications out of memory onto the disk (to a place known as the swap file). This operation slows down the rate at which you can switch between applications and eventually the performance of the applications themselves.
You won't regret the 1GB upgrade. It is definitely worth the money (~$100).