The swap is much like virtual memory. It uses disk space to page in and out data that ram doesn't have room for and does this with some intelligence lower priority things are what will swap first allowing things with higher priorities to get more of the real ram.
NOTHING is better than a whole lot of real RAM. the best solution is to not need to use the swap at all...
if you plan to move your swap file the best location is a separate small drive or partition of a separate drive.
it should not be more than 500 meg anything larger and you are defeating the purpose of isolating it.
the reason you isolate it is when data is written to a drive it can fragment and cause the drive to thrash around looking to find this data. causing the drive to loose performance. the system and your users space will no doubted get a lot of data read and written to it this combined with the data being written to the swap can slow things down.
swap files are created in 80 meg file increments as needs get higher swap space increases in 80 megs increments.
the reason you would use a separate drive is so that the swap is not competing with the other data to be read and written. as you can see with one drive setups a partition helps limit the area it has to look for the swap data in but the drive head still has to jump all over to read and write... while this solution is fine better is 2 drives with the swap on a small partition on the secondary drive. this further helps because now the drive doesn't have to bounce around reading and writing. small partitions are easier for a drive to manage and are less prone to bad fragmentation. this is why the swap should not be more than 500 meg any more than this would waste space and defeat the goal in addition the swap partition should not be used to save files to it is just for the swap.
in the end what all this sums up to is... you won't see amazing speed changes that's not what this does. it helps things run more efficiently so the speed gains are more in that you don't sit watching beachballs and system performance doesn't degrade while running a lot of apps. again NOTHING BEATS REAL RAM!
more info can be read here as well as a step by step how to guide
My main system config -
640 megs RAM
2 internal IDE Drives
Capacity: 27 GB
X 8.49 GB
Users 8.49 GB
Backup 8.49 GB
Size: 6 GB
swap 500 meg
Volume format: Mac OS Extended (HFS+)
I put classic on this drives partition because I rarely use it so most of the time the drive is free to run as swap only.
as you can see from above
classic, OS X, Users, swap all have their own partitions.
I hope this helps a bit