I have 1GB RAM, and have paging file disabled completely. it runs better than having paging file on.
occasionally, the system will complain about "virtual memory too low" but it is pretty rare. it's only when I have a really big program open, like if I'm playing Generals with the map full of hard enemies or something....
though I do keep my system running pretty lean. I disable lots of things, like System restore, themes, and many useless windows services