Setting a small, static VCACHE is NOT very good!!!
You add RAM to speed up the slowest part of your computer: the disk!!!
I find that Windows 9x VCACHE will grow too large to cause swapping. I limit it to all my memory minus what I think is reasonable for the OS; typically 64 MB. One exception is machines with >511 MB of RAM. Of course, if you have that much memory you should be using NT, but that is another thing altogether. If you have >511 MB of RAM (say 768 MB, for example) you MUST limit the MAXFILECACHE to 511 MB (523264) or lower or MS DOS programs won't run. Ironically, if you open a MS DOS Prompt with more than 511 in VCACHE upper limit, you get a message "Program too big to fit in memory"! Damn Bill and his humor.
If you have lots of FREE MEMORY it isn't put to use very well! A well optimised system will have most of its memory in disk cache after a while. This means programs open at lightning speed and game levels load as fast as possible.
However, if you edit large images in PS, obviously it would be preferrable to have the VCACHE MAXFILECACHE variable considerably lower, say 1/4 of your system memory.
Cheers!