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Therefore, is it possible that a Linux machine w/ 2GB RAM might out perform an MS windows machine w/ 2GB RAM?

Absolutely sear. The major difference here is memory management, in that Linux, and Unix in general(and therefore the Mac, because of it's BSD heritage) utilise a superior Memory management system to the Legacy memory management system used by Microsoft in Windows (including Windows 7). Anyone who cares to investigate will notice that Windows starts writing to the page file (Swap in Linux) from the moment it boots ups, even when there are no applications running, and continues to do so throughout any usage session - reading and writing to disk is slow, compared to accessing RAM, but Windows continually reads and writes to Disk (the page file). Linux and Unix, don't actually start reading and writing to Swap (Page file in Windows) until a lot of applications are running concurrently - the point at which this happens depends on what the applications are and how much RAM there is..... on my 32 bit laptop (running Ubuntu 9.04) with 3 Gig of RAM, I can have half a dozen applications open, including the GIMP processing Photos downloaded from my camera and a Virtual Machine running Windows XP, and still have a Swap usage of zero (0). The Windows XP machine will of course be reading and writing to it's page file on the Virtual hard drive, and slowing down the entire system, even when I have no applications running on the windows VM.

On a side note, Windows running on a Virtual machine on Linux is actually very stable.

I was in a position to compare Ubuntu Netbook Remix on a netbook with Windows XP on a netbook, and the performance difference was very noticable with the Windows machine feeling like wading through molasses, while the Ubuntu Linux machine felt more or less normal.