The cache manager on Windows Server 2008 (including R2) overallocates physical memory to the cache causing the StorageServer to swap which in turn causes excessive performance degredation.
This problem has been addressed in V126.96.36.199 and later. For earlier versions, follow the instructions below.
Before executing anything open the task manager on the Perfomance tab and monitor the Physical Memory Usage graph (blue line). When you set the upper cache limit you want to see the blue line drop.
SetSystemFileCacheSize off 1024
where off indicates we don't want to set a lower limit and 1024 is the upper limit in MB. A good guideline is to ensure the cache does not use more than 20% of the physical memory. Monitor the Physical Memory Usage when the limit is applied. The idea is to make sure the usage stays under 90%.