Let me guess, it uses ToolHelp32 to enumerate all processes, then does SetProcessWorkingSetSize(hProcess, -1, -1) on each one of them?#1
Basically useless then, although not as über-retarded as doing alloc-all-memory. It does still mean, however, that all processes will have their working sets trimmed, which very likely means flushing stuff to your pagefile. Including the apps you are currently using, which will then have to re-read their stuff back from the pagefile.
Windows does automatic process-trimming when it needs to, and it tries to only trim the least-recently-used pages of memory... which should generally mean a smoother ride.
If you need more free memory, buy more RAM. Don't fall for placebo tricks.
edit: #1: I was close - it uses EmptyWorkingSet(), which is the same as the SetProcessWorkingSetSize trick. The application is written in VB6, btw.