Can anyone direct me at what is so hungry on here?
"Inactive" memory is effectively "free" (it will be reclaimed if other apps need it).
Inactive memory can be retained for use by apps that may need to reference it until it is needed for something else. An example of this i see all the time is inactive memory caused by VMware Fusion's use as disk cache for virtual machines.
AS above, just keep an eye on the page-outs (more importantly, the rate/sec) and ignore the blue section of the graph. Consider the blue section (inactive) the same as "free".
"Free" memory on a modern system that uses virtual memory and buffer cache is WASTED memory. It is doing nothing to improve performance, whilst "inactive" memory may help (and is reclaimed if needed anyway).
"VM" size has nothing to do with real memory usage, it is virtual address space provided to applications.
VM size will be large on lion/64 bit systems because OS X provides a much larger virtual address space in this situation. It doesn't actually
allocate the "VM" size of memory....