Just to put in my $0.02 (having done this fairly recently, and feeling pretty strongly about this particular topic):
As a poor (nearly broke, actually) grad student I went into debt to buy my girlfriend (now wife) a whopping 0.51 carat ring (obviously, I'm not in debt anymore). She was so happy about the prospect of getting married that she really didn't give a ***** that the ring was so small. She still wears it daily. And loves it. I've offered to buy her a new (larger) one and she has vehemently declined. She's a keeper.
If your girlfriend/fiancee/whatever measures how much you love her by the size of the ring you give her, find someone else.
IMHO.
blue