I wrote an article about this and published it on my web site. Here is the meat of it.

Definition of Windows Paging File: A hidden file on the hard disk that Windows uses to hold parts of programs and data files that do not fit in memory. The paging file and physical memory, or RAM, comprise virtual memory. Windows moves data from the paging file to memory as needed and moves data from memory to the paging file to make room for new data. Paging file is also called a swap file.

The Windows Paging File is one of the most important, yet least recognized features of Windows XP. Optimizing the paging file will increase hard disk access and defragmenting it on a regular basis will noticeably increase system performance. Max out the PCs RAM and you have the perfect Windows Paging File recipe.

Windows XP includes an option that allows you to run the OS without the paging file. However, selecting this option may cause memory errors, so it isn't recommended. In fact, the system will perform much better if you configure the paging file for optimal performance.

Here are some paging file optimization tips:

* Do. The more RAM the better. RAM is faster than a hard drive and the paging file is located on the hard drive. Since the data is constantly swapping locations between the hard drive and the RAM your PC will access the data faster if the majority of the data is in the RAM.

* Do. Use Task Manager and Performance Monitor to monitor the paging file and RAM usage. Since memory prices have dropped, you should always have plenty of RAM. In fact, this is the best thing you can do to optimize your paging file.

* Do. If you know the optimal paging file size for the system, set the initial and maximum size to the same value. This will prevent the paging file from growing and fragmenting. See below for step-by-step guidelines.

* Do. If you have more than one hard drive -- no partitions -- you can split the paging file between these two drives. Alternatively, you can put the paging file on the hard drive that doesn't hold the Operating System, especially if that disk is faster.

* Do Not put paging files on different partitions that belong to the same physical hard drive. This will severely hinder your performance!

* Do. Before you create a new paging file, defragment your hard drive.

Follow these steps to change your paging file settings( Click the Images to Enlarge):

The rest is just screenshots if you want to see them
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