My server has 3GB of physical memory. A previous Windows administrator set the page file size to 2GB, but I'd like to reduce the page file's size so I can use more memory for other needs. Will reducing the page file size decrease my application's performance?
In general, a well-tuned SQL Server running on adequately sized hardware will perform few physical reads or writes to the page file. SQL Server performance won't suffer if the page file is too large and not being fully used, but having a large page file wastes disk space. The page file's Percent Usage Peak counter in Performance Monitor will help you determine your page file's utilization. I suspect the utilization will be low, assuming your server is dedicated to SQL Server. Using this Performance Monitor counter as a guide, you can effectively shrink the page file without affecting performance.
Many of my clients put the page file on the fastest disks and often use multiple page files spread across multiple disks to try to improve performance. But a well-tuned SQL Server shouldn't experience noticeable physical paging in the first place, so the physical layout of your page file isn't a concern. It's likely that you have more serious performance problems to deal with if your SQL Server is reading and writing to the page file regularly. You need to understand why you're paging so frequently, rather than worry about making the paging operations faster.