What does this option basically do? Does it free the unused memory? If so, how does it affect the performance? In what cases will I use it?
From the VMMap Help manual:
I would assume that the feature is similar for RAM map and that the "Empty Working Set" feature releases all physical memory.
Excerpt from my copy of Windows Sysinternals Administrator's Reference 1st ed:
From personal experience, I just used taskmgr to view the memory changes.
Also, an image of the same below: - http://i.stack.imgur.com/V7AsR.gif