I believe hayne covered that ;)

What timing! This morning Software Update just happened to come up and ask me if I wanted to some updates; I believe they were Java update, Video firmware, Daylight Savings Time, and the last was a Security Update. I said yes, rebooted, installed the new firmware, rebooted again, and I've been testing all day in disbelief. I think it was the Java update that did it. The thrash problem seems to be completely fixed. I have been pounding on everything all day, and can't cause the thrash problem anymore. Still using 14 GB of VM. But for page faults now, I see 64,000 in with only 1400 out. The room is much quieter, and the system is much quicker. If it was in fact a Java problem, that might explain why this problem was so prevalent for some users, and not much if at all for others. It all depends where you browse and how much you leak that VM thinks needs to be written before the app exits.

It does when it marks all the memory pages were scribbled on for temporary storage of endless Java junk! Ever see 450,000 page outs in Activity Monitor?! I would not have believed it either. It was not pretty.

NORMALLY it works as you say. And my system seems to have finally reached that state. 2 GB of VM for Parallels Desktop is no problem if it isn't using all of it. And it's not.

I even have HP All-in-One Comm still installed and running.

I'm glad that the problem now seems to be fixed.
But if it were just a Java problem, then you would have only experienced the problem with apps that are using Java - e.g. as you say, with web browsers that accessed sites with Java applets. But other apps would not be affected. I.e. the RAM usage of your browser (e.g. Safari) would perhaps grow a lot, but that of other apps would not be affected. And if you quit the web browser, the problem would go away.
So the problem would have been evident to you as a browser-specific problem. But you seemed to be talking about large memory use by all (or many) apps, not just the web browser.

Moreover, you could have proved that it was a Java-related problem by disabling Java in your web browser preferences.

Really hard to say. The one constant in all of my different setups is that I always did a lot of browsing with either Safari or Firefox. At the moment, I can run Adobe Reader, same time as Photoshop, HP All in One, Eudora, Firefox, Excel, Word, PowerPoint, Terminal, Activity Monitor, Address book, Calculator, and some other stuff. Oh yeah and Parallels Desktop with Windows XP running a few apps. The system runs right down near zero on Real Memory left, but no big thrash, just a light shuffle when needed. I pushed it enough to get to 2 swapfiles, but the amount of paging is still completely reasonable. I can't prove it was the Java update that fixed it though. Wish I knew.

If a similar thing happens again, you now are in a better position to be able to track down the cause:
- check how much RAM each of your apps is using
- quit apps that you suspect to be causing the problem
- monitor your memory use to see when you start swapping so you can see which app might be the cause

By the way, having near-zero "free memory" is not a problem - OS X considers unused RAM to be wasted RAM and so uses it for disk caches etc when not needed by apps.

Funny you mention the Ram total. What I don't get is this. When I look in Activity Monitor, I can use copy & paste, and move all the numbers into an Excel spreadsheet. Now do a global replace and remove the MB label from the memory numbers, and hand-convert anything in KB or GB to MB. Now sum the real memory column. I get around 870 MB. Why is the system paging, I have 2 GB of real memory.

It shows around 950 MB "active", and another 491 wired. Still makes no sense to swap anything. 525 inactive, as you say for disk cache. But why swap the disk cache? Defeats the purpose of a disk cache, doesn't it.

Bottom line, the massive improvement I reported yesterday is still holding, 70,000 page ins vs only 7000 page outs, but I still see a lot of room for improvement. In my case, if I could simply turn off VM, the system would likely run better.

"inactive" memory is not only used for disk cache - it holds memory that was used by apps but not used recently.

Fair enough. Still, to your point, what is the real memory usage. It is 850 MB, plus 450 wired. Why should any paging occur? It is worst with MS Word by the way.

Well, bad news. After a week's worth of uptime (5 days), the system shortly resumed paging its guts out. It has made 6 swap files, total of around 2 GB. Page faults are back up to 150k in, 190k out. Since all the paging is a massive whack in performance, freezing the whole machine for seconds at a time, I am still unimpressed with the VM management in 10.4 at least on a Mac Pro. If anyone is getting different results, I am all ears as to what they did to get it that way. As far as I can see, this is normal behavior.

Again I have apps using a claimed 850 MB of average real memory size in Activity Monitor, and 2 GB physical memory installed, tested, and working properly. Why it should need an extra 2 GB of swap space is goofy. What ever happened to RM (real memory) Unix?!

The "average real memory" is almost totally irrelevant. What is relevant is the peak or maximum real memory that was needed. If at any time the demand for memory exceeded the amount of physical RAM that you have, then you will get swapping.

Note that wired memory (e.g. as reportedly used by Parallels) is not available for swapping, so relatively high amounts of wired memory will make swapping more likely since there is effectively less RAM available for your other apps.

I suspect that you will find that the VM system is working as designed - that the reason for your high amounts of swap is that the apps you are running are demanding (at some time) large amounts of memory.

Bottom line:
You need to monitor what real memory is being used by the apps you run and be sure to quit any apps (e.g. like the browser in that other thread you referenced above) that are taking up undue amounts of RAM.

(If in your case it is the browser that is sometimes taking large amounts of RAM, you might want to use the AppleScript that I wrote and which was the subject of an article on the main macosxhints site a month or two ago. Thsi AppleScript warns you when the browser RAM usage gets above an amount that you specify.)