I'm with frangipane - my machine is thrashing unusably, and it might as well have frozen.
I have a 5-year old iMac with 2Gb of RAM. It ran Snow Leopard and Xcode 3 quite well.
Very recently I shifted to Lion (the machine has a Core 2 Duo) and Xcode 4. So far I have only compiled "Hello World" type programs, as I'm trying to learn the new layout and settings. I very soon find that I have about 600 Mbytes of "inactive" memory and almost no free memory. If I try to do anything the disk drive whirrs, and I get a lot of swapping - it seems that the "inactive" memory isn't being given back. It got so bad that I eventually force-quit Xcode, and even then the machine took a while to react and stop frantically swapping.
I have tried the purge command in a terminal. It has helped. But I'd much rather have the "inactive" memory given back freely. Is there any way of disabling the "inactive memory" mechanism?
I was going to buy a new machine fairly soon anyway, but I'm annoyed that the software upgrade has changed my current machine from being useful to being quite useless for development.