A Mac will use as much memory as is available. If you have less hard drive space, it will use less VM. It's just a precaution if you do start running a lot of programs.
These type of things are better left worried about by those people who understand them. You don't seem to, so I wouldn't worry much.
The size of your hard disk has no bearing whatsoever on the "VM Size" reported through Activity Monitor.
The
VM Size figure is a total of the requested
Virtual Address Space by all processes running on the system. However, because of the way Mac OS X handles memory allocation, a reported VM Size of 42.8 GB will not consume 42.8 GB of resources (in memory or on your hard disk). When a request to allocate memory is handled by the kernel, it creates a new virtual object--which you might think of as a small record of the request--but it does not allocate any
pages to the request. Pages are the actual slices of memory that consume real space, both inside memory and on the hard disk.
Basically, the kernel does
lazy allocation. It figure that applications, for the most part, request to have much more memory allocated than they will really ever use. The kernel waits until a process starts reading from or writing to these requested addresses before actually allocating pages--and even then it will only allocate enough pages to satisfy that operation.
As has been stated before, if you want an accurate picture of how much space is really being consumed by virtual memory, you need to look at how many swapfiles have been created in the /var/vm folder.
Regarding your lack of space problem, I would grab a free copy of
WhatSize to find the largest space offenders.
