Virtual memory
The page file is also referred to as the swap file.
It is a portion of hard disk assigned for the system memory to write out some of its content to if it starts to get full. When the hard disk is used to hold memory info it is called virtual memory. As hard disks are stupidly slow compared to SDRAM the performance will drop if the system starts to write and read memory to and from disk. Windows does not handel virtual memory in the most effective way, i.e. it uses it when it does not have to. If you have several Gigs of ram virtual memory is unlikely to be required and in my view should be set to minimum or even disabled.
If you get a FFD ( fast flash disk ) the hard disk performance is greatly improved.
Thus if you load the OS onto a FFD the page file on the disk will not significantly slowdown the system.
Windows Vista allows virtual memory to be stored on a flash pen drive. Some pen drives are now sold as Vista optimizers for this use.
Conclusion If you can avoid writing memory to disk your system will work faster.