I used to run a create-your-own-quiz django powered site with 6k uniques/day(in the last few days), with no cache, and it barely touched my 360 vps. You can see some nice graphs here: http://slig.imgur.com/linode
From my experience looking at those graphs, I see that the iorate is pretty low and that the cpu is almost idle. Checking "top", I see that the RAM was sufficient, as there were almost no swap use.
I also use chartbeat.com to see how the users are interacting with the site in realtime. They provide also two useful metrics: user load time and server load time. Looking at those, I can see that the user experience is pretty good, and that the server is up and responding very quickly.
I run a Django-powered site on a 96meg host on an over-loaded Xen host built with ancient P4 Xeon servers (No VT instructions). I use nginx and sqlite to cope with my tiny amount of available memory. With that said the site sees little traffic (<500 hits a day, peaks ~60 hits in 1 hour), but I've never run into issues.
you could go crazy and use a uClibc buildroot. build it on your desktop and transfer an image to your slice. i use slack, but that's not exactly tiny...
I want to get one for me but I don't want to get rammed in the ass when I realize it is not enough and need to upgrade to at least 1GB.
I see I can get 1GB RAM at prgmr.com for the same $20