Personally I disable my page file, I've 2GB RAM (3GB in my current laptop, but 1GB set up as a RAM drive). In general I don't recommend this, unless you're up to doing some test runs....you can potentially run out of RAM very quickly which will at minimium kick you out of the game, or worst case make XP unstable (solved by a reboot). That being said, I have never had any problems in any of my systems with 2GB RAM, and I play a LOT of games. I would not do this in Vista however, and eventually there will be a game I want to play where I will run out of memory and will either have to add more RAM or enable my swap file.
The 4GB file limitation is usually due to the file system used: NTFS supports over 4GB without any issues, but FAT32 wont. The NTFS file system in XP is a newer and much superior version than in W2K, so this may not apply to Windows 2000 users. Windows 2000 was not intended as a gaming platform, more as a stable business platform, but since it supports DirectX 9, it does have the ability to serve as a gaming platform also.
As for page file optimization, generally its best to run it on its own partition, on a drive that is not your system drive nor your boot drive (ie on a 2nd hard drive, not just a 2nd partition on the same hard drive). I've heard of running it on a RAM drive....but if you have that much RAM to spare it would be better off used for something else.
Page files do not require fault tolerance so running one on a RAID-1 (mirror) or RAID-5 actually decreases performance. Running it on a RAID-0 (stripe) can greatly increase performance.
And finally, if you happen to have multiple physical hard drives in your system, spreading the page file across these drives also improves performance.
Also, keeping the page file defragmented can help performance. Since Windows Defragment tool cannot defrag the page file, here is a link to one that does:
http://www.microsoft.com/technet/sys...ageDefrag.mspx