From http://www.edbott.com/weblog/?p=687

To see how much memory is in use, open Task Manager and click the Performance tab.

The data shown here can be confusing, and in fact much of it is completely irrelevant. For the most part, you should look at only two values here. Under the Physical Memory heading, look at the value that appears to the right of Total. In this example, I’ve got 261,616K (roughly 256 MB) of physical RAM installed. Your value may be different, and if your system uses an inexpensive “shared RAM” video adapter you may discover that you have less physical RAM than you thought.

Now look at the first value under the Commit Charge heading. The number to the right of Total here indicates how much RAM is actually in use by programs and processes. If the number here is bigger than the amount of physical RAM, your system has been forced to swap data to disk, and that’s the cause of the current performance problem.

To see how much RAM is in use by each program or process, click the Processes tab and then click the Mem Usage heading twice to sort the list in descending order. You can use this information to decide which programs to close so that you can return to normal performance. (Remember, though, it’s perfectly OK for a process to use a large amount of RAM if you’ve got the physical RAM to spare. Don’t just start closing programs that use large amounts of RAM!)

If you find yourself regularly using more memory than you have physical RAM (in other words, if the Total Commit Charge is consistently more than Total Physical RAM), it’s time to order a memory upgrade.