I had cause to be reminded of this article I wrote for on#sun almost ten years ago and just noticed that I had not transferred it to my blog.
/etc/system is a file that is read just before the root filesystem is mounted. It contains directives to the kernel about configuring the system. Going into depth on this topic could span multiple books so I'm just going to give some pointers and suggestions here.
Warning, Danger Will Robinson
Settings can affect initial array and structure allocation, indeed such things as module load path and where the root directory actually resides.
It is possible to render your system unbootable if you are not careful. If this happens you might try booting with the '-a' option where you get the choice to tell the system to not load /etc/system.
Just because you find a set of values works well on one system does not necessarily mean that they will work properly on another. This is especially true if we are looking at different releases of the operating system, or different hardware.
You will need to reboot your system before these new values will take effect.
The basic actions that can be taken are outlined in the comments of the file itself so I won't go into them here.
The most common action is to set a value. Any number of products make suggestions for settings in here (eg Oracle, Veritas Volume Manager and Filesystem to name a few). Setting a value overrides the system default.
A practice that I make when working on this file is to place a comment explaining why and when I make a particular setting (remember that a comment in this file is prefixed by a '*', not a '#'). This is useful later down the track when I may have to upgrade a system. It could be that the setting may actually not have the desired effect and it would be good to know why we originally did it.
I harp on this point but it is important.
Just because settings work on one machine does not make them directly transferable to another.
This tells the kernel not to start running the page scanner (to start paging out memory to disc) until free memory drops below 8mb (1024 x 8k blocks). While this setting may be fine on a machine with around 512mb of memory, it does not make sense for a machine with 10gb. Indeed if the machine is under memory pressure, by the time we get down to 8mb of free memory, we have very little breathing space to try to recover before requiring memory. The end result being a system that grinds to a halt until it can free up some resources.
Oracle makes available the Solaris Tunable Parameters guide as a part of the documentation for each release of Solaris. It gives information about the default values and the uses of a lot of system parameters.