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I read somewhere (I think Mark's blog from sysinternals), that the memory a program takes up as listed in Task Manager is not a good way to judge where all the memory on your pc is performing.

Is this true? If so, why? I can't remember the full details

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up vote 4 down vote accepted

You're likely talking about his "Pushing the limits" series. You can find the articles here.

Physical Memory

Virtual Memory

Paged and Nonpaged Pool

Here's an overview of what the Task Manager columns mean.

The main thing about memory usage displayed in task manager is it only displays one aspect. I prefer to use Process Explorer which allows a little more customization on all the different memory statistics to display so I can compare them. A process's memory usage can include Private Working Set as well as shared memory usage that include memory usage that is available to other process via loaded libraries.

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