I have 3gbs of memory in my system and a fast processor, yet my system would start choking when I used too much memory, so I sat out to fix it.
What I learned is that there's a setting in /etc/sysctl.conf called vm.swappiness that controls to what level the Linux kernel should use disk based virtual memory from 1-100.
In Ubuntu, this is set to 60 by default, which roughly translates to 60% of all virtual memory being disk based, and therefore, slow.
To change the value simply edit the file (e.g. gksu gedit /etc/sysctl.conf) and add the line vm.swappiness = 1 (change 1 to what you think is appropriate) - the change will take effect on next reboot.
If you want the effect now, you can run sudo sysctl vm.swappiness=1 in a terminal.
A very welcome effect of this change is that Nautilus is now many, many, many times faster!