out of memory error


I have a laptop with 2gb RAM running vista and I currently have the page
file disabled (that's another story). I have just had a message saying
windows is running low on memory and I need to close some applications (even
though i'm hardly running anything)

when I look at task manager, I can see about 300mb used by running
applications, but 1200mb is used for the cache

so, vista has run out of physical memory because it's decided to use all the
memory for caching, leaving none for applications. and that means I need to
close down my applications???

please, please, someone tell me vista is not that dumb. is there a sensible
explanation for this?