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Windows Server 2003 R2 x64 - IIS Issue (RAM)

THE SERVER
http://i.imgur.com/b0VChGM.png

THE PROBLEM
We have about 400 websites running on this server. We had them all under 1 App Pool which we noticed kept having freezing points every now and then so we separated the websites into 4 different app pools. 100 sites per app pool.

The issue is even more evident. What happens is the PF Usage keeps going up to the max get's to about 9GB and then stalls all the websites which then we can see the PF usage starts to go down to 4GB and then starts to go back up. While the PF Usage is dropping the sites become unavailable which lasts about 1 minute.

Processes show that w3wp.exe taking up most of the Mem Usage & VM Size.

WHAT WE DID ALREADY
We have ordered more ram. It currently shows the server has 4GB of RAM. We will be increasing it to 8GB this coming Saturday.

WHAT I WOULD LOVE TO KNOW
1.  Is this enough? Is there anything else we should do to try and resolve the issue?
2.  How does PF Usage go above 4GB of RAM since we clearly only have 4GB how is it showing more than that being used?

Thank you for your help.
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zc2
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1. I'd prefer to keep each site in it's own app pool. You can use ADSI scripting to automate the management tasks, such as making the pools and assigning the sites to them.

2. When the server runs out of the physical memory, it uses the virtual memory which is just a file on the hard drive (imagine the speed). This is a very simplified answer, search swapping and paging on the internet for more info.
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RAM Usage went down to a stable 3GB from 9GB.