"Windows works in mysterious ways"
Seriously, though, by default windows will even page out parts of it's kernel (those that aren't, surprise surprise, nonpageable). This might've been a good idea back in the days of very little ram, but I've found that this imposes a speed hit when running very greedy programs (especially games). Back when I had a paging file, I found that my system took fairly shorter to "recover" after running a game, if I enabled the DisablePagingExecutive
setting - YMMV, though.
Personally I've disabled the paging file entirely (only possible in XP, if you do it in win2k a temporary small pagefile will be created on system boot, along with a warning dialog box). I've got 2 gigs of ram now and haven't run into trouble, with 1gig of ram most things worked, but the game "painkiller" would crash on a few levels.
Whether you'll be able to run without a paging file depends on the apps you use, and it must be added that some apps behave very
badly if they run out of RAM. Generally, my system feels a bit smoother when not having a paging file - it does seem like NT by default is a bit too happy about trimming the working-set and utilizing the pagefile.
It's been some years since I used paging file last, and I can't really remember the specific situation you're talking about. I was generally annoyed that it seemd to be used when it wasn't necessary, though.