It's been a few days since I've upgraded to 8 GB of RAM on my mid-2010 Macbook Pro, and for those who might be reading this thread and wondering whether such a system can run Xcode, the upgrade has definitely made a huge difference.
While the Simulator still takes a few minutes to launch or switch devices, and I still get some hangs when switching to the Storyboard, when I'm actually writing code I no longer get constant, 10 - 30 second periods of spinning beach ball, or having all the text turn one color; I can pretty much just write code as fast as my fingers and brain can go. Running on the Simulator is also quite a bit faster, and I have yet to have a build fail to attach (a pretty regular occurrence before).
Note that this is with the usual suite of other applications open: Chrome (20 - 40 tabs), iTunes, Open Office, Preview, Mail, etc... Activity Monitor says I'm using around 6.5 GB of RAM, so it's no wonder it was hurting before.
So definitely still get a newer system if you can afford it, but if a mid-2010 Macbook Pro is the best you can afford, or what you happen to have, as long as you have at least 8 GB of RAM (OWC and others sell 16 GB kits that aren't officially supported by Apple but are largely reported to work), Xcode should work fine.