increase swap file on PC acting as server in a workgroup? Virtual memory?

Run Task Manager and see if it is out of available physical memory and/or Commit Charge @ limit.  Is the CPU maxed?  What is the server being used for?  

Three pcs access it for excel / word docs.
But it seems to struggle sometimes.

Users report characters appearing very slow.
Im not there when it happens intermittently but hear them give out afterwards. …

Paging size? ...... Virtual memory? Ive 40 gigs hdd free - what should I change it to?  

Its currently at:
Initial size 2046
Maximum 4092.

It says below that
recommended 3070
currently allocated 2046

I changed it to 3070 - 4092 beofre you posted I wait to see what the users report.

It seem to be faster when I rebooted it remotely.

i.e.
Initial size  3070 (what it recommended)
Maximum 4092.

I would set both and sizes(initial and maximum) to the same amount.  Typically twice the amount of Physical RAM in the machine.  If I have 2GB I would set it to 4096, but 4092 should work just as good.

Back to knowing where your bottleneck is... have you looked at Task Mgr to see where you are running low on resources?  
Avail Physical Memory
Committ Charge
CPU

It acts as a "server" to three PCs.  (excel / word on a few shares)
Im not there to see how sluggish the pc  becomes and when.  
It may be nothing to do with the fact its a "server"

* The users are stressed, non tech and unhelpful even aggressive at times, I cant ask them for any diag help, no point.

I think changing the VM may have improved things.
I find it odd that windows cant re jig itself after installing memory to optimum on auto for this.  

MS recomends 1.5 times real memory.

So if I have 2 gigs - whats the exact figure for max?
rshooper - Are you sure its ok to set the min and max as the same

This may help you
http://support.microsoft.com/kb/237740