It always amazes me how much mis-information is written about virtual memory. Just for clarity, virtual memory is also called a pagefile.
It is widely reported that virtual memory is slow. Compared to RAM, yes, it is slower,BUT, only slightly. The data that is stored in virtual memory is not only contigous, it has already been read and compiled by the CPU so it executes immeadiately when retrieved.
The Windows system and any good application software look for and utilize virutal memory for quick retrieval of lesser used functions and data lists to free up RAM for the core functiions.
To get the best performance utilizing virtual memory, the amount is 1.5 x RAM. An example would be if you had 256Mb of RAM, you would set it at 384Mb. and so on.
The minimum and maximum should be set to the same amount. This does two things, it allocates all the space at once which makes it easier for the system to store it contiguously and keeps the memory manager from interrupting the system to allocate more when a lesser amount has been used up.
If you have a second drive, set up the first partition for just a pagefile. If you can do this, also add a small (64Mb is fine) pagefile on c:\ for the system to use.
If you look at the report after defragging your drive, it tells you how many fragements there are in the pagefile. If it reports more than 5, set the amount to zero, reboot, and reset it to the original amount. This clears the pagefile and reallocates it, you start fresh.
Of course, more RAM is the best way to improve performance, but until you get above 1Gb, virtual memory does a reasonable job of helping the overall performance.