What is that virtual memory?

Its been many days since I have heard the term 'virtual memory'. On carefully browsing about it I came to know that its size matters in the processing speed but I did not get much of it. I tried seeing my size of virtual memory but unsuccessful. Could anyone please tell me about the virtual memory in the computer, its recommended size on a particular condition and why is it important? I would also like to know its relation with the hard disk.
