actually you may consider reducing your paging file slightly so that your computer uses your RAM more often instead of the paging file. RAM is much much faster than anything coming from the hard disk, so you want to use it as much as possible. and since your physical memory is usually only half-used, you're safe reducing the paging file. i have 1GB of memory in my inspiron 9100, and i have my page file also set at 1GB. you may even consider turning off the paging file all together. something you should also try is going to START > RUN > and type 'msconfig'. choose the Selective Startup option, and then the Startup tab. this is a list of every program that loads with windows. personally, i have 49 entries, only 14 of which i allow to start up. the only things i allow are my antivirus, anti-spyware, firewall, and Object Desktop programs. this will significantly reduce your startup time, and free up a lot of your physical memory.
but photoshop is a heavy program, and is going to slow things down in pretty much any setup. if you use it a lot, you may consider more ram anyway. and with bittorrent, if you've got a couple large downloads going with many connections, you may notice a slowdown where your system needs memory to manage the connections for each peer.
the only problem with upgrading is that you should check to see if your 1GB of RAM is made up of two 512MB chips (most common from the manufacturer), or one 1GB chip. if it's the former, you're gonna end up spending more to upgrade because you'll have to take out at least one of the chips.
