Virtual memory is used when the computer starts to run out of RAM. The computer starts to use your hard drive for program memory.
Normally, virtual memory will not exceed the amount of RAM available in the computer. So if you have 2GB of RAM, you also have up to 2 GB of virtual memory.
It is possible to increase virtual memory but that will in turn reduce the size of your hard drive. It also will make your computer run slowly.
If you're running out of virtual memory, the obvious thing to do is try to close any programs you aren't actively using and don't run so many programs at once in the future. This also applies to multiple windows in your web browser. Rebooting can also help, as some programs waste memory (which is a bug), and over time, this can lead to your computer running out of both RAM and virtual memory.
A longer term solution is to add more RAM to your computer. This will boost your overall performance, as well as boosting your system's virtual memory, just in case you really need it.
If you are running Windows XP, you should increase your memory to 2GB. If you are running Vista, try to go to 4GB or even 6GB if you computer can support that much.
RAM is cheap and is a lot less expensive than having to buy a whole new computer if you can make due with your current one for a few more years.