postmaster confiugration and hardware configuration

Hi...

I'm newbie, and confuse on configuration....

I already installed postgresql 7.0.3 on Compaq Proliant ML 350 - Intel
Pentium III 600 - RAM 128 MB.
Operating system is linux on distribution SuSE 6.4
This server only running database itself. Directory '/data' is independent
partition and size is 3GB
This database is used for application with intensive querries and around 30
connection at a time.
Postmaster configuration is default.

Problem comes up with decrease performace of query result when connection
reached around 30, long wait situatioon is like you can make a cup of coffee
on the kitchen...around 12 second. The bad news is...broken pipe() and all
connection to postgresql is gone...

The application using 'begin...commit' method.

Any suggestion to increase performance of my postgresql....at least great
configuration for postmaster and hardware...?
Pleasse.... :-)

Regards,
Eko Pranoto
Database Administrator of Health Care Information System Project
Rumah Sakit Pertamina Jaya
Indonesia