virtual memory is still a very important part of windows xp, not untill vista comes out will we see if anything has changed on this.
untill then using windows xp you *must* enable virtual memory or some called the page file or swap file== virtual mem, if you think you have enough memory using 2 gigs of ram think again!, battlefield 2 has had a peak memory throughput of 1.6gigs !!! now if u have 2gigs this means your pc is definatly accessing the swap file to move huge amounts of data through the cpu, some of the swap file movements can be massive especially gaming on next gen games,video burning or editing,mp4 or wmv/a-hd,if you are using vivo features or high def tv then swap file usage will be tremendous.
as a general rule it should equal or 2x your total actuall memory amount.
or "allow windows to decide"
setting it manually will garner different results but never drop it below recomended settings remember system restore demands access to the swap file so you dont want to get caught with your pants down.
setting it too low will also introduce a possible volitile windows environment.
*by the way on some of the Ghost recon-advanced warfighter forums it is rumored that GR4 will demand 2gigs of ram for total throughput*
http://computer.howstuffworks.com/virtual-memory4.htm