Virtual Memory is a setting on your computer, whereas Physical Memory (or RAM) refers to the amount of memory actually installed in your computer.
To understand what Virtual Memory is, one needs to understand what memory does. When you open a file or program, your computer loads the needed information into memory from your hard drive. If you open a second program, it loads when it needs for that one as well, while keeping the other one in memory too. As you open more and more programs, things start to get complicated.
The amount of memory you have in your computer is finite, so it can only load so many things before it starts to get "full." That's where Virtual Memory comes into play. When you open too many things for your Physical Memory to handle, it temporarily writes them back to disk in an area reserved for Virtual Memory.
Think of a juggler juggling three balls. If someone tosses her another ball, and then another and another, she will eventually need to set a ball aside in order to continue juggling more balls. Virtual Memory is like the juggler putting one of the balls in her pocket while she juggles the others.
Now that we know what Virtual Memory does, let's talk about how to set it correctly. According to Microsoft, your Virtual Memory should be set to between 1.5 times and 3 times the Physical Memory on your computer. (See
http://support.microsoft.com/kb/308417)
If you're getting errors about your Virtual Memory being too low, it could very well be because it isn't set properly. Follow the link above for instructions on how to change that. However, it could also just be because your computer needs more Physical Memory to handle all the tasks you want to do. Think about it. Say your computer has 512MB of Physical Memory. You open enough things so that it fills that 512MB up with data and starts writing to Virtual Memory in order to keep "juggling" all the things you need. Even if your Virtual Memory is set correctly (768MB to 1536MB in this case), that's still not a whole lot. But if your computer has 4GB (4096MB) of Physical Memory, it could easily do everything you need without even having to write to Virtual Memory. So you may be getting Virtual Memory errors, but the real problem may be that you need more Physical Memory.
These days, a computer with 1GB of RAM is ok for surfing the web and using some basic word processing, and that's about it. Depending on what you need to do, 2GB is a good place to start.
Hope this was helpful for you. Good luck!
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