Exactly what I did, since I realized I'd never done it myself. I haven't gotten around to toying with the page file yet...I'm guessing it's a percentage, which is bound to be huge on a 640GB hard drive.
EDIT: "Recommended: 4599 MB"
Well I don't want to hijack this thread too much, but...
The Page File (or Virtual Memory) is set by the user, Typically it's best to put it around 2-4GB. The amount used (the part I was saying was kind of crazy) should stay as low as possible when idle, XP can run under 200MB if done right. Vista/W7 will run upwards of 500MB from what I've seen, and that's after a lot of trimming. The 2GB used by the laptop you showed is just crazy for an idle amount. Unless of course that DxDiag was saved with a lot open (Best to be idle so you know idle Page File usage). If Skuzzy sees a DxDiag with a huge Used Page File, trimming that is always* his first suggestion.
*This may not reflect true stats as Skuzzy has a very complex brain and may suggest different things first before seeing the page file.As for Kilz XP vs W7 thing: It's really personal preference. I dual-boot XP and W7 right now (just started using W7 few days ago) and personally prefer XP. I love the looks and newness of W7, but XP is still smoother for my system, but that may be I haven't trimmed the system down much (still running a 1GB page file idle). W7 is newer so obviously it's the future, but why fix what isn't broken....much? XP is fine for now if you don't want to get W7 just yet. As for whether you can handle it, most likely yes, but that would require a DxDiag or Parts list since some things aren't Vista/W7 supported very well if at all.