Don't take the Jekyll & Hyde comment personally, it wasn't directed at you but rather made to illustrate how home users sometimes do all kinds of things to their computers without really knowing or fully understanding the consequences of these actions, generally speaking machines in corporate/enterprise environments don't take the kind of abuse that home machines do. To learn you have to experiment and you have to be willing to push the boundary, I've done (and still do) plenty of "experimenting" and at times some of it doesn't exactly turn out as expected... I strongly encourage experimentation to those who want to learn, unexpected results are part of the learning experience.
There is a lot to address in your post, the Windows memory management is a rather complex subject so I'll just briefly address a few things and feel free to ask more questions if you need further clarifications or more in depth explanations.
Firstly, the page file size and the 1.5 to 3 times RAM recommendation: This recommendation dates from the NT4 era and it made a lot of sense then when machines had very little RAM, on today's machines the recommendation is not always appropriate. If the XP machine has less than 1 gig of RAM then you could follow the recommendation, if the machine has more than 1 gig then the recommendations are not necessarily appropriate, enabling PAE just for the sake of having a page file larger than 4GB may not be a very good idea. In most cases rather than creating and excessively large page file it is best to have a the system dynamically manage the page file. The argument against the system managed page file is that the page file may become fragmented and this may affect performance, if this is a concern then set a static page file.
The Task Manager and the PF usage information: The Task Managers PF usage information is a bit misleading, this doesn't really report the page file size but rather the current commit charge or the page file that would be needed if all the running processes would ask for all their allocated memory all at once, in reality this doesn't happen very often. If the commit charge is lower than the installed RAM then the page file is not really used other than for mapping purpose and the size of the file will for all intents and purposes be negligible. The actual page file usage can be monitored with Perfmon or you can get small, simple and easy to use free third party utilities to do it.
About using flash drives as RAM disks: Personally with the slower write times factored in the equation I don't see much to be gained with this and I see a lot of potential problems. Rather than trying to implement this I would instead try to reclaim the unused unaddressed memory in the upper address space and use it as a real RAM drive, this is the fastest available unused resource on your computer, depending on the hardware installed on your machine you may have 750MB to over 1GB or unaddressed unused RAM in your machine, with Gavotte's RamDisk you may be able to reclaim this unused RAM, having a page file on this disk would be ideal as the system would page in the RAM rather than from RAM to disk.
Other paging file strategies: If your system really needs a page file larger than 4GB or if the system must page then you can have multiple paging files, Windows can have a bunch of paging files! Ideally the paging files should be on different hard disk (not different partitions on the same disk) and on computers with IDE disks the paging paging file should not be on a disk that is in a master/slave relationship with the operating system disk or another busy disk, on SATA disks this doesn't matter. On older computers with IDE controllers an effective way of spreading multiple page files about on different disks is to use and add-on IDE controller card. If you have more than one paging file on different disks then by default Windows will favour the page file on the least busy disk. If you are running a server or application that needs a lot of paging space and if you only have one hard disk you can still make use of multiple paging files by mounting them to folders.
These may be helpful:
Ask the Performance Team: What is the Page File for anyway?
Make Sense of Memory Management and Key Memory Measurements
Things to consider before you enable System cache mode in Windows XP
RAM, virtual memory, pagefile, and memory management in Windows
The Virtual-Memory Manager in Windows NT
John