The paging file is one of the most important operational aspects of a well-functioning Windows 2000 Server. Considering how cheap hard drive space is these days, it’s really not all that difficult to keep your servers in storage space.
Some of that space, called a paging file, is allocated for use by the system. As soon as RAM fills up (in the managed fashion that Windows 2000 Server uses RAM), the system "swaps" the least-used chunks of data to the paging file. The OS uses this space as virtual RAM so it can use more RAM than it really has. Consider a sample Windows 2000 server running Terminal Services and MetaFrame 1.8 that has 128 MB of RAM. It has automatically set aside 192-384 MB of hard drive space for use as a paging file.
This follows the general rule that you should configure the virtual memory for one and a half times your physical RAM. The sample server ranges to up to three times the physical RAM because of the Terminal Services and MetaFrame installations. Such operations require large amounts of system resources. Other installations that require similar resource allocation are SQL Server and any serious public access IIS operations.