Virtual Memory
Assume that your program (eg Oracle) allocated 100 MB of memory upon startup - your VM size goes up by 100 MB though no additional physical / disk pages are touched. ie VM is nothing but memory book keeping.
The total available physical memory + paging file memory is the maximum memory that ALL the processes in the system can allocate. The system does this so that it can ensure that at any point time if the processes actually start consuming all that memory it allocated the OS can supply the actual physical pages required.
Private Memory
If the program copies 10 MB of data into that 100 MB, OS senses that no pages have been allocated to the process corresponding to those addresses and assigns 10 MB worth of physical pages into your process's private memory. (This process is called page fault)
Working Set
Definition : Working set is the set of memory pages that have been recently touched by a program.
At this point these 10 pages are added to the working set of the process. If the process then goes and copies this data into another 10 MB cache previously allocated, everything else remains the same but the Working Set goes up again by 10 Mb if those old pages where not in the working set. But if those pages where already in the working set, then everything is good and the programs working set remains the same.
Working Set behaviour
Imagine your process never touches the first 10 pages ever again, in which case these pages are trimmed off from your process's working set and possibly sent to the page file so that the OS can bring in other pages that are more frequently used. However if there are no urgent low memory requirements, then this act of paging need not be done and OS can act as if its rich in memory. In this case the working set simply lets these pages remain.
When is Working Set > Virtual Memory
Now imagine the same program de-allocates all the 100 Mb of memory. The programs VM size is immediately reduced by 100 MB (remember VM = book keeping of all memory allocation requests)
The working set need not be affected by this, since that doesn't change the fact that those 10 Mb worth of pages where recently touched. Therefore those pages still remain in the working set of the process though the OS can reclaim them whenever it requires.
This would effectively make the VM < working set. However this will rectify if you start another process that consumes more memory and the working set pages are reclaimed by the OS.