Edit your system.ini file in the windows directory - under the [386Enh] heading Add the line ConservativeSwapfileUsage=1 This can significantly reduce Virtual memory use as it makes Windows use (fast) RAM before the (slow) Swapfile. This setting will tell Windows (ME, 98?) not to use the swap file at all until all of the RAM is used. After all of the RAM is used, the computer will push most of the infrequently used data to the swap file.
Having said that, I have VM turned off and I've been running win98 with 512MB ram for ~6 months and I've had no problems. The main problem you'll run into (with VM disabled) is trying to open more programs than you normally do, when the amount of ram is filled there is no place to swap (of course this same thing can happen if you set a max swap file size as well!) memory out to make room to open another program... if you have 512mb or more of ram and you're not using programs that are memory intensive (ie. 3d rendering, corel, etc.) I'd say you'd be okay, but some things don't work without having VM enabled; suspend, hibernate, etc. YMMV!
Bottom line is turing VM off is no different than setting a maximum swap file size... most people don't understand that and will not think twice about setting min & max swap files size, but will strongly suggest not turning VM off. Once again, YMMV!