Actually your both right and wrong at the same time..
The best most effecient way to stack your memory is to place the swap file on a drive that is partitioned as FAT.. Yes you heard that correctly..
My typical install has a drive designed just for the swap file, formatted as FAT, setting my VM as follows.
C: Drive 50 Meg , for dump files. Not really needed but it will bark if you don't set it..
D: or what ever drive I'm using set at two times the installed amount of system ram.. Most cases you want to go more depending on your plans to upgrade memory. Then set the min at 1-1/2 times the amount of ram installed with the max set at two times the amount of ram.
So in this case 128mbx1.5=192mb min and 256 max with the fat file system.
If you looking for a major speed boost by doing this, you can forget it.. You need MORE RAM in the system.. 98 is not so bad with this setup but will perform slowly no matter what if you run a lot of apps.
This setup also works well with NTFS filesystems and you see a lot of top professional server techs doing this..
Good Luck..