Specify the Android-x86 ISO that you downloaded. In the Attributes, click on the CD icon with a small down arrow, and pick "Choose Optical Virtual Disk File.".
Android doesn't specify a bare-minimum requirement for memory, just keep in mind what apps you plan on running.
Note that you should choose the appropriate bit type for the version of Android-x86 that you downloaded. Set Type to Linux, and Version to Linux 2.6 / 3.x / 4.x.