I was honestly shocked by the graph you provided--at the moment, it looks like you are FAR overtaxing your system, and are likely experiencing slowdowns that would be alleviated by installing more RAM.
Now, I say yes without qualification because I assume you don't want to cut back on your computing style. 4GB should be enough for even a few applications to be open at one time, as long as they aren't particularly resource-heavy. You could help us figure out the specifics by providing information on the rest of your hardware, OS version, and what applications you usually use.
I recently upgraded my recent iMac from 4GB to 12GB of RAM, and experienced a drastic increase in performance. My RAM usage in Activity Monitor was nowhere near as bad as yours, but my "free" usage (green on the graph) was less than a gigabyte. Multitasking systems like to have a bit of "breathing room." Even though not all of the RAM on your system is "active," the only 10MB free signifies that essentially, every last bit of it is accounted for by something running on your system, which is forcing you to use a large amount of virtual memory for things that should be more readily accessible.
On my 12GB system (which I admittedly have far too many things running on at one time), I have about 2-4GB "free," and I never have to wait for virtual memory to be accessed anymore when switching applications and the like.