hmm...I just tried adding the MS_MEMORY_FREELIMIT config variable (the one you may have been referring to) with 999Mb (max virtual memory free limit allowable) and it seems to actually be working, ie. paging once it hits the 999Mb free limit for virtual memory.
Now the question is why doesn't it page when the default (150Mb) value is used. Of course CONNECT 64-bit will resolve all these issues, but unfortunately we are stuck with 32-bit for our current project.