<p>What are the best JVM settings you have found for running Eclipse?</p>

Here's what I use (though I have them in the shortcut instead of the settings file):
eclipse.exe -showlocation -vm "C:\Java\jdk1.6.0_07\bin\javaw.exe" -vmargs -Xms256M -Xmx768M -XX:+UseParallelGC -XX:MaxPermSize=128M