Near the end of this article, Mark Russinovich briefly discusses system-managed pagefile sizes:
You’ll notice that the default
configuration is for Windows to
automatically manage the page file
size. When that option is set on
Windows XP and Server 2003, Windows
creates a single paging file that’s
minimum size is 1.5 times RAM if RAM
is less than 1GB, and RAM if it's
greater than 1GB, and that has a
maximum size that's three times RAM.
On Windows Vista and Server 2008, the
minimum is intended to be large enough
to hold a kernel-memory crash dump and
is RAM plus 300MB or 1GB, whichever is
The rest of the article is well worth reading, and does talk a bit more about what happens when Windows grows the pagefile.
In my own experience, system-managed pagefile is the best option to take in the vast majority of cases.