We are recommending for z/VM 5.2.0, 25% of processor memory be defined as xstore up to a max of 2GB (that is no more than 2GB). This is our rule of thumb. This seems sufficient in most cases to buffer active guests from idle guests suddenly becoming active and bringing in entire working sets. Also allows pages to be moved out to DASD based on 2 levels of LRU, the xstore one being time stamped.
Bill Bitner - VM Performance Evaluation - IBM Endicott - 607-429-3286