Physical memory is all used up. Why? Because it's there, the system should be using it.
You'll note also that the system is using 113M of swap space. Bad? Good? It depends.
See also that there's 103M of cached disk; this means that the system has decided that it's better to cache 103M of disk and swap out these 113M; maybe you have some processes using memory that are not being used and thus are paged out to disk.
As the other poster said, you should be using other tools to see what's happening:
- Your perception: is the site running appropiately when you use it?
- Benchmarking: what response times are your clients seeing?
- More fine-grained diagnostics:
- top: you can see live which processes are using memory and CPU
- vmstat: it produces this kind of output:
alex@armitage:~$ vmstat 1
procs -----------memory---------- ---swap-- -----io---- -system-- ----cpu----
r b swpd free buff cache si so bi bo in cs us sy id wa
2 1 71184 156520 92524 316488 1 5 12 23 362 250 13 6 80 1
0 0 71184 156340 92528 316508 0 0 0 1 291 608 10 1 89 0
0 0 71184 156364 92528 316508 0 0 0 0 308 674 9 2 89 0
0 0 71184 156364 92532 316504 0 0 0 72 295 723 9 0 91 0
1 0 71184 150892 92532 316508 0 0 0 0 370 722 38 0 62 0
0 0 71184 163060 92532 316508 0 0 0 0 303 611 17 2 81 0
which will show you whether swap is hurting you (high numbers on si, so) and a more easier to see performance-over-time statistic.