When a query is running that needs to sort data, the database estimates how much data is involved and then compares it to the work_mem parameter. If it's larger (and the default is only 1 MB), rather than sorting in memory it will write all the data out and use a disk-based sort instead. This is much, much slower than a memory based one. Accordingly, if you regularly sort data, and have memory to spare, a large increase in work_mem can be one of the most effective ways to speed up your server.
A data warehousing report might on a giant server run with a gigabyte of work_mem for its larger reports.
The catch is that you can't necessarily predict the number of sorts any one client will be doing, and work_mem is a per-sort parameter ...
