Best OS & Configuration for Dual Xeon w/4GB & Adaptec RAID 2200S

About a year ago we decided to migrate our central database that powers various
intranet tools from MySQL to PostgreSQL. We have about 130 tables and about
10GB of data that stores various status information for a variety of services
for our intranet. We generally have somewhere between 150-200 connections to
the database at any given time and probably anywhere between 5-10 new
connections being made every second and about 100 queries per second. Most
of the queries and transactions are very small due to the fact that the tools
were designed to work around the small functionality of MySQL 3.23 DB.
Our company primarily uses FreeBSD and we are stuck on FreeBSD 4.X series due
to IT support issues, but I believe I may be able to get more performance out
of our server by reconfiguring and setting up the postgresql.conf file up
better. The performance is not as good as I was hoping at the moment and
it seems as if the database is not making use of the available ram.

snapshot of active server:
last pid: 5788; load averages: 0.32, 0.31, 0.28 up 127+15:16:08 13:59:24
169 processes: 1 running, 168 sleeping
CPU states: 5.4% user, 0.0% nice, 9.9% system, 0.0% interrupt, 84.7% idle
Mem: 181M Active, 2632M Inact, 329M Wired, 179M Cache, 199M Buf, 81M Free
Swap: 4096M Total, 216K Used, 4096M Free

PID USERNAME PRI NICE SIZE RES STATE C TIME WCPU CPU COMMAND
14501 pgsql 2 0 254M 242M select 2 76:26 1.95% 1.95% postgre
5720 root 28 0 2164K 1360K CPU0 0 0:00 1.84% 0.88% top
5785 pgsql 2 0 255M 29296K sbwait 0 0:00 3.00% 0.15% postgre
5782 pgsql 2 0 255M 11900K sbwait 0 0:00 3.00% 0.15% postgre
5772 pgsql 2 0 255M 11708K sbwait 2 0:00 1.54% 0.15% postgre

Here is my current configuration:

Dual Xeon 3.06Ghz 4GB RAM
Adaptec 2200S 48MB cache & 4 disks configured in RAID5
FreeBSD 4.11 w/kernel options:
options SHMMAXPGS=65536
options SEMMNI=256
options SEMMNS=512
options SEMUME=256
options SEMMNU=256
options SMP # Symmetric MultiProcessor Kernel
options APIC_IO # Symmetric (APIC) I/O

The OS is installed on the local single disk and postgres data directory
is on the RAID5 partition. Maybe Adaptec 2200S RAID5 performance is not as
good as the vendor claimed. It was my impression that the raid controller
these days are optimized for RAID5 and going RAID10 would not benefit me much.

Also, I may be overlooking a postgresql.conf setting. I have attached the
config file.

In summary, my questions:

1. Would running PG on FreeBSD 5.x or 6.x or Linux improve performance?

2. Should I change SCSI controller config to use RAID 10 instead of 5?

3. Why isn't postgres using all 4GB of ram for at least caching table for reads?

4. Are there any other settings in the conf file I could try to tweak?