With the upcoming "Tango" update to Windows Phone, OEMs will have the ability to make phones with just 256 MB of RAM, shaving off a few precious dollars from their bottom line. Of course in doing so, about 5% of the apps currently on the Marketplace (including ours) won't work unless the developer re-works aspects to make it more efficient on memory usage. Such phones include the Nokia Lumia 610 and possibly the ZTE Orbit. Those devices display a similar notification in their "About" section too:
Of course there are instances where developers may not want to adjust their app--either they don't want to compromise performance/esthetics or they use periodicTask or a ResourceIntensiveTask. In that case, developers can actually opt-out of making their app compatible and instead a message will appear alerting users that this app won't work on their phone.
Nokia has now published details on both how devs can enable this feature as well as what the user experience will be like. The latter part involves a message noting that the app cannot be installed and when tapped a pop-up window will notify them that they need a phone with more RAM.
Source: Nokia Developer; Thanks, anon, for the tip