What is Virtual memory?

It is a hidden file on the hard disk that Windows 2000 uses to hold parts of programs & data files that do not fit in memory. The paging file & physical memory, or RAM, comprise virtual memory. Windows 2000 moves data from the paging file to memory as needed & moves data from memory to the paging file to make room for new data. Paging file is also called a swap file.

Another explanation is that it is, temporary storage used by a computer to run programs that need more memory than it has. For example, programs could have access to 4 gigabytes of virtual memory on a computer´s hard drive, even if the computer has only 32 megabytes of RAM. The program data that does not currently fit in the computer´s memory is saved into paging files.