Hmmmmmmmmm.... not quite following you limitdown, and ive
written operating system memory managers

I think your basically right but the terminology is throwing me off a little.
Anyway.... Windows does load must of the app into memory.
The parts that need to be there. Loading any other part
does not help at all since it never gets executed.
It also uses a lot of the memory for cache (file cache).
As you run out of physical memory, it starts throwing away
its cache memory (as it should).
When you run out of cache, now it has to start paging/swapping
memory out to disk. It will page out the least used memory,
like IDLE applications. Now your in the danger zone.
If you use ANY more memory, your toast. Youve crossed the line.
At this point your performance goes to HELL and your 3.2ghz
pentium 4 starts running about as fast as an old 286

Your OS is now spending 99% of its time moving pages of memory
back and forth between your harddrive and physical memory
just so it can run.
So the answer to how much memory is:
Enough to run the apps you need to run in parallel WITHOUT swapping.
For me... im running 512meg and its not enough.
I run some HUGE simulations that get VERY memory intensive.
I may get 2 gigs of ram for my next platform for more speed
via much larger data caches.
peace
axeman