<< The suggested remedy to this problem is to first physically remove any memory beyond 512 MB and modify the system's configuration (MaxFileCache in System.ini) to specify a hard limit of 512 MB or less for the Vcache driver. Another option is to upgrade to Windows NT4 or Windows 2000. >>
Doing this doesn't actually reduce the memory usage to below 512MB. The Min/MaxCacheSize setting sets how much physical memory is used to cache hard drive data, not how much memory is used or cached. This setting has been used for a long time by many people to increase performance, in the same way that setting a permanent swap file can increase performance. Windows doesn't have to work to calculate and change the size of the cache, so it can be doing other things. And you obviously don't want Windows taking up all your memory with disk cache instead of program operations.
I'm using 640MB in Win98SE right now and it's working just fine. I was already using modified min and max vcache settings so I had no problems. If you've been using a program like CacheMan or CacheBooster from AnalogX, then you've probably already got limits set on the vcache size.
Other suggestions from Microsoft for how to keep the problem from manifesting itself: don't install more than 512MB of memory; install it but then use another setting that limits the amount of physical memory Windows addresses (which means you've got anything above 512MB just sitting there inactive). Obviously Microsoft is just stupid. Why limit yourself to 512MB or less when you can make this one setting change and it will work just fine above that?
Having a huge amount of memory may not actually make a difference, but it's not likely to reduce performance any, and memory is cheap and you can probably use it later on. Using the excuse that DDR is 'just around the corner' and that you'll be upgrading soon doesn't work, because DDR is NOT going to be just suddenly flooding the market anytime soon, and people will still be using their SDR systems for some time.
Sometime this week I'm hoping to throw together an Unreal Tournament server, and I plan on using the extra memory I've got laying about that was a result of maxing out what I've got in my system right now. At that point, I'll again be completely out of spare memory modules. If I want to put together another system at that point, I could either buy more cheaply, or use some of what's in my main system now. Since it's not actually doing much now, I won't notice a performance drop, but in the meantime, there's no reason for me not to have it installed.