In general, Photoshop runs best with the most memory it can get. However, there are some general rules to follow when determining exactly how much memory to allocate to the application if you want to run more than one program at a time. Photoshop prefers just over 3mb of RAM plus three times the size of the file you intend to work with (assuming it is an RGB image). For example, if you intend to work on a 24-bit image that is 640x480 pixels, the image will be 900kb in size. Following the three times rule for RGB images, one should allocate roughly 6mb to Photoshop (3mb plus 3x900kb).

Photoshop stores a copy of each image in memory. When you open more images than the amount of RAM allocated to Photoshop can handle, it implements its own virtual memory scheme. Essentially, Photoshop's virtual memory expands the available memory to the application by moving idle images to the hard drive. By moving the images to the hard drive, the allocated RAM can be used to work on the currently active image. If you switch between images, Photoshop will have to access the hard drive, load the image into RAM, and put the old image onto the disk. Because RAM is faster than a hard drive, significant delays can occur. If you can afford to allocate Photoshop more memory (RAM), it is best to do so.
© 1996 Nick Ustinov.