Will keeping Activity Monitor running in the background make me incur a significant performance hit? I know things like top in unix (if refreshed often) can use up 100% of the CPU. I ask because I leave it running to monitor my memory usage throughout the day. I often run low on free memory (less than 300MB free) on a 4GB MBP.
The hit entirely depends on how often you set Activity Monitor to poll the system and what you're working on - if it's the standard 2 seconds on a 2006 2.16Ghz MacBook Pro I saw about a 2%-3% CPU hit (insignificant). At the Very Often setting (0.5 seconds) it was a much more noticeable 25%. Even then depending on what you're doing a process continually eating 25% of your CPU cycles may be a non-issue.
Instead of running Activity Monitor have you considered running a program like iStat menus or Menu Meters or even a script with GeekTool to keep an eye on your RAM usage? By polling for less information it will reduce the performance hit (perceptible or not) that you would have with Activity Monitor (which has the overhead of a GUI, a background daemon, and processing extra information).