The amount is dependent on the software actually installed on your computer. With time it will increase, as registry fragmentation sets in.
It's a good idea not to minimize the allocation too much, since the ability to go back a week might sometime save your skin (I mean the computer's).
The simplest way to calculate how much space you need at the moment, is to calculate the total disk space taken by the restore points and divide it by their number.
Here's how to calculate this on Vista (and probably Win7):
How To Reduce Disk Space Used By Windows Vista System Restore
For XP see:
Windows XP System Restore Frequently Asked Questions (FAQ)