A: For Mac OS 9
The default settings should be OK for most users. If you intend to load large images (> 1 Mb) or many images (> 100) or you have a large number of Undo levels (> 10) then you may need to allocate more. Set the Undo and Clipboard buffers to the maximum image size that you normally handle. Set the memory allocation of Image SXM using 'Get Info' in the Finder to
 
(max image size)  x  (max number of images loaded at any time + Undo levels)  +  10 Mb
 
A: For Mac OS X
Memory is not allocated to applications in the same way that it is under Mac OS 9. Every application running under OS X has access to 2 Gb of memory, and OS X uses virtual memory to share the actual memory between all active applications and other processes.

A: In general, yes. The 'Image SXM Prefs' file is not saved whenever you change one of the options in a dialog box. If the changes were saved automatically, then you would have to remember to set them all back the way they were if you wanted to start with your preferred settings next time you used Image SXM. The exception to the rule is changing the size of the Undo and Clipboard buffers, which will save the preferences file and then inform you that changes will take affect after Image SXM is quit and relaunched.
 
Saving the preferences is achieved by hitting the 'Save Prefs File' button in the SXM Preferences dialog box, or by selecting the Record Preferences menu item.