Is there a way to create virtual memory? I'm curious if there's a way to create virtual memory for an Android phone. I have a 4gb mirco sd card in my phone.
Any ideas?
Yes.  You can partition your SD card and add a swap space to it; I have this on my G1.  However, it's fairly complicated voodoo. (link is for G2, but instructions should be good for most phones; however, you should probably search XDA for whatever your phone is to be sure)

Swapper 2 from the market will do this for you, apparently.  I haven't tried it myself, I use a custom ROM that has it built in.