Traditionally it always has been real memory - system RAM or VRAM - that's been most important to the flying equation. But recently virtual memory has been a scarce resource. What happened?
To understand this situation, consider X-Plane 6 vs 8. Back in the X-Plane 6 days, a typical system might have 256 MB of system RAM, 16 MB of VRAM, and 2 GB of virtual memory* for X-Plane. That's a ratio of 8:1 virtual to real RAM and 128:1 virtual to VRAM.
These ratios are actually pretty useful. At any given time only part of the loaded scenery is visible, so only part of it needs to be in real RAM/VRAM. So having that extra virtual memory lets us load a big chunk of scenery at a time, rather than having a lot of complex details to load tiny bits of scenery.
Today's computers are a bit different. 2 GB of RAM is not uncommon...that'd be a ratio of 1:1! And most gamers cards have 256 MB of VRAM now for an 8:1 ratio with VRAM. 512 MB cards are coming out and nVidia's monstrous 8800GTX comes with (gasp) 768 MB of VRAM! Insanity!
The problem is: RAM and VRAM are getting larger, but virtual memory is not! This means the ability to have the part of the scenery you don't see in virtual memory is getting more and more difficult.
Why can't we get more virtual memory? Well, the problem is to get more virtual memory we need 64-bit CPUs, 64-bit operating systems, 64-bit drivers, and 64-bit applications. That's a lot of parts that all need to be 64 bit and means a full computer upgrade and motherboard upgrade. Of the 5 machines Apple sells right now, only one is 64-bit, so even some of today's fastest machines aren't 64 bit. That's slow adoption.
So in the meantime we're adjusting X-Plane's strategy to deal with increasingly limited virtual memory. Back in X-Plane 6 it was acceptable to leave all objects their textures cached in virtual memory for later use (which sped up reloading of scenery).
X-Plane 860 (coming soon to a beta near you) will change this - unused textures and objects will be fully purged, which will hopefully address the problem of running out of virtual memory during long flights over lots of different custom scenery.
* 2 GB? Well, technically an application can have 4 GB of virtual memory, but the OS keeps some for itself. Some OSes take 2 and leave 2, some take 1 and leave 3, but even if we had all 4 GB of virtual memory for application use (and we don't - the graphics driver steals some too) we'll have 4 GB machines soon, so virtual memory is disappearing.