Limiting the System Cache is sometimes beneficial! Specially on 64 bit version of Windows.
I had some problem after installing 8GB additional system RAM under Windown 2003 x64 server and disabling the page file / setting it to 1GB from 4GB. It seemd to use all the RAM for system cache (file cache) and displayed ‘virtual memory too low’ warnings once or twice. I mean I added 8GB RAM and decreased the paging file by 4GB (3GB) and I never had problems before so I should have been fine. +8 -3 = low memory? Somehow the math doesn’t add up.
I found a lot of articles describing the same problem I had. (windows uses half of the memory for file caching)
Then I tried tweaking some settings.
Registry settings: Session Manager\Memory Management\
LargeSystemCache
http://technet.microsoft.com/en-us/library/cc784562(WS.10).aspx
…
I’m not sure if the System Cache info in Task manager is accurate or what does it exactly count. SysInternals Process Explorer displays differente value (equal to Performance monitor Memory\Cache Bytes counter) for System Cache.
To reset the cache size use SysInternals CacheSet.
http://technet.microsoft.com/en-us/sysinternals/bb897561
or Microsoft Windows Dynamic Cache Service
http://www.studentguru.gr/blogs/acardaris/archive/2010/06/27/microsoft-windows-dynamic-cache-service.aspx
More info about memory management and system cache:
High System Cache usage with high Disk Read I/O on Windows x64
https://www-304.ibm.com/support/docview.wss?uid=swg21318658
Too Much Cache
http://blogs.msdn.com/b/ntdebugging/archive/2007/11/27/too-much-cache.aspx
You may experience a decrease in overall system performance when you are copying files that are larger than approximately 500 MB in Windows Server 2003 SP1 or in Windows Server 2003 SP2
http://support.microsoft.com/default.aspx?scid=kb;EN-US;920739
Things to consider before you enable System cache mode in Windows XP
http://support.microsoft.com/kb/895932
There are a lot of other good articles about Windows Memory Management, Performance Monitoring and I cannot list them all.
Pushing the Limits of Windows: Physical Memory
http://blogs.technet.com/b/markrussinovich/archive/2008/07/21/3092070.aspx