Virtual memory is just hard disk space made to appear like extra RAM, and is also called swap space or a disk swap file. For demanding applications such as digital video, virtual memory doesn't suffice- you need real RAM. Virtual memory allows you to run programs for which you would otherwise not have sufficient RAM. Because disk access is much slower than RAM access, virtual memory will have poor performance relative to that of actual RAM. The Virtual Memory option is set in the Macintosh Memory Control Panel, the Window 3.1 "386 Enhanced" Conrol Panel or the Windows 95 Memory Control Panel
A RAM disk is the opposite of virtual memory. Precious RAM is used to buffer information off the disk, just in case it is needed repeatedly or quickly. This can consumes 1-2 MB of RAM on an 8 MB system, hampering performance. The user can disable the RAMdisk by commenting out the appropriate line in the CONFIG.SYS file under Windows, or via the Memory Control Panel on the Macintosh.
There may be multiple applications trying to manage disk and RAM caching. Your CD-ROM driver, Windows and Director all may attempt to cache data from the CD or RAM to the hard drive at various times.
Preferred Memory Allocation
Minimum Memory Allocation