Windows 95, NT 4, and later offer dynamic memory allocation, which means that each application gets the memory it needs as it needs it. But Photoshop is something of a memory pig and has a habit of using every spare bit of RAM it can get its hands on. Left to its own devices, it might gobble up all the RAM and bleed over into Windows' virtual memory space, which is less efficient than Photoshop's own scratch disk scheme.
The Physical Memory Usage option helps you place some limits on Photoshop's ravenous appetites. The option lists the amount of RAM available to all applications after the operating system loads into memory. You can then decide how much of that memory should go to Photoshop. If you like to run lots of applications at the same time — your word processor, Web browser, spreadsheet, drawing program, and Photoshop, for example — then set the Used by Photoshop value to 50 percent or lower. But if Photoshop is the only program running — and if you have less than 32MB of RAM — raise the value to 70 to 80 percent.
Caution I recommend against taking the Used by Photoshop value any higher than 80 percent, particularly on a low-capacity machine (32MB or less). Doing so permits Photoshop to fill up RAM that the operating system might need, which makes for a less stable working environment. As I've said before, if Photoshop is going too slow for you and hitting scratch disk too often, buy more RAM — don't play dangerous games with the little RAM you do have.
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