If you receive error messages that warn of low virtual memory, you need to either add more RAM or increase the size of your paging file so that you can run the programs on your computer. Windows usually manages this automatically, but you can manually change the size of virtual memory if the default size isn't large enough for your needs.

Virtual Memory is free space reserved by the computer for shifting data into in the case that you use up all the RAM in your system. It acts as simulated RAM. In order to increase the virtual memory.
Increasing the virtual memory on your PC does not necessarily require a reboot therefore you can continue with your work immediately after.

Am I correct in assuming that GOG automatically removed some hyperlinks from that post?

This would have been a good advice 10 years ago. Now, if you have this problem, you either try to run a game/program on wrong hardware or there's a program which has memory leaks.

New users can't post hyperlinks.

How much space do you reserve for the pagefile nowadays? (I'm still on an old pc)
Any expert source about the topic?

If you're running out of video memory or a very large program shuts down on your 32-bit system (like Marvel Heroes 2015 (where I learned the trick) or Kerbal Space Program), you can get a GB back by making your kernel smaller.

Most people won't notice a difference in performance unless they use programs that need a big kernel (I hear communications-heavy apps could do that, but nothing is slowing on my system at all and programs are all running much better).

Right-click Command Prompt in the Accessories program group of the Start menu.
Click Run as Administrator.
At the command prompt, enter “bcdedit /set IncreaseUserVa 3072"
Restart the computer.

This will make your 2GB Windows 7 kernel become 1GB on a 4GB machine. Then you'll have 3072MB to work with your programs.

edit: http://msdn.microsoft.com/en-us/library/windows/hardware/ff542202%28v=vs.85%29.aspx

edit 2: http://msdn.microsoft.com/en-us/library/windows/hardware/bb613473(v=vs.85).aspx

Depends how old and how much memory you have. I use my pc for gaming mostly and it's usually 1GB pagefile on a 4GB system and 500MB for an 8GB system. With 8GB I hardly needed a pagefile but I always kept one to be safe.

I let windows do it for me. Right now its size is at 700 mb, but its peak was 80 mb on a system with 4 gb RAM.

If you hibernate the machine, set it at the same as your RAM (because hibernation saves the contents of RAM to disk, using the page file), otherwise you most likely don't need one at all (depending on how hungry your applications are for memory, but you don't want them to page, really, you don't, get more RAM instead).

No no, I only meant on new computers.
My current XP pc only has 1.5Gb ram and 2.4Gb fixed pagefile (and that size is just perfect to avoid its fragmentation).
Only 500MB for 8GB? Wow I hope that such option has been improved on new Windows, because that caused horrible fragmentation and disk writes for me with the old Xp. I don't like using hibernation, luckly ; )

For hibernation is hiberfil.sys. And on Windows 8 you have the old swapfile.sys back for those stupid metro apps.