I'm running 2 dedicated servers at the moment for an intensive database application: one is the web-server and the other is a database server only.
In the peak hours, the web-server (XEON 2.8, 1GB RAM) CPU's are stalled at 100% causing the page loading rather slow.
I'm thinking that it might be RAM's fault.
During these high loads, looking at task manager, under Commit Charge, I observe that the "Total" field is around 600/650 MB. The available Physical Memory is around 120/180 MB.
Do you think I might be needing some extra RAM here as the memory swapping might be affecting the application performance?
If you're caching queries in your database, another 1GB of Ram could help out a lot. Especially if it's swapping to the hard drive which is a major performance hit. What version of mySQL are you running?
If it turns out you are CPU bound, either upgrade to a dual CPU system, or get another web server to talk to your DB server and DNS round robin them. If you go the latter route, you'll double your available bandwidth, which may be an advantage if you're near your current limit.
If you are memory bound, get more RAM. However, if you are not memory bound, getting more RAM won't help you.