Swapwatch watches your swap - your virtual memory files on disk. They're located at the path /private/var/vm and take serialised names of the form swapfile0, swapfile1, and so forth.
An OS X system (as far as 10.6) starts you with the single swap file swapfile0 of 67,108,864 bytes (64 MB). As things get tougher, the system adds further swap files. The size of the second one (swapfile1) is the same as the first. But things go ballistic soon after that.
OS X users regularly complain of a 'sluggishness' and of seeing that dreaded spinning beach ball after long use without a reboot. It's the virtual memory system acting up. The more swap on disk, the more 'swapping' the system might have to do to switch applications.
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