I regularly run several Java applications. There are about 4 applications that eat up a gig of RAM each(as I see in the Activity monitor). For the rest of the OS, I guess it is using another 3 gigs. I typically only have 100-200mb free memory. Is that the true memory I have available? Or is a type of swap memory used? Essentially, I have 8 gigs of ram on the system, should I get 16 gigs? I tend to see slow performance at the 100mb mark. What about inactive memory, that typically runs at 3 gigs, is that memory available?
The best pointer to see if you need more RAM is checking "Page ins" vs "Page outs" in "Activity monitor" "System memory" tab. A simple rule of the thumb is that if "outs" count is higher than "ins", you need more memory. This has to do with usage of hard drive providing virtual memory.
Also, there is lots of memory available in the inactive section. There are mostly things that programs designated as never to use again. But OS keeps them, so if you close a document, it still sits in RAM and can be opened instantaneously. If any other activity needs free memory, OS ditches data here and offers RAM to the system.
You can also try running:
command in terminal, it forces disk and memory caches to be emptied. You get to the state similar to reboot.