well, your diagnosis has been suggested by members here already..

1. RAM
2. HDD space (available space)
3. Background processes/services

1. 512 is actually enough however it'll start lagging when you work on A3 size at 300DPI and above. one way to test is create an A# size canvas with 300dpi and then what you do is taruh gradients around and see when your computer starts lagging.

2. the computer will fall back on 'virtual memory' if the RAM doesn't have enough of it. but might not be such a large issue.

3. background services are the cause to computer slowdown when starting up, shutting down and even when you've got a lot of applications running.

if you're running multiple applications at a time like me (I run Photoshop, Illustrator, Dreamweaver, Flash, Firefox - uses more RAM now, iTunes..After Effects sometimes..) then you'll definetely need a minimum 1GB of RAM for applications to work at an optimized speed.

and don't forget to clear your computer of spyware, run Disk Cleanup and Disk Defragmenter every once a month at least.

This post has been edited by etsuko: Apr 6 2006, 01:49 PM

a note about the Memory and Image Cache

what it does is that it tells the computer to allocate that percentage of your RAM dedicated to Photoshop. which means that if you've got other applications running, it might still lag.