Good question, and one I can't answer very well.
The LZMA decompressor memory requirements are dependant on the dictionary size used when compressing - this can be anything up to 64MB, but I think is capped at the size of the file and in any case usually a lot smaller than this.
LZMA also has a few K overhead beyond this. The 7-Zip overhead I believe is only a few KB per file.
plus you need enough memory for the entire compressed and uncompressed versions of each file.
All in all, you should be able to decompress with 2MB unless you have big files in the archive and/or it has been compressed with a large dictionary.
I would welcome some real world results as this is all theory.
It doesn't need any more memory than the OS4 version though. In fact, probably a little less due to 68k code being smaller.
Chris