Help Optimizing JVM Settings

Okay so I am running a server off of a cheap linux box I threw together. When there are only a 2 or 3 players on the server everything is perfect. Once I hit about 6 players it starts to get laggy. When it starts to get laggy, I notice that the RAM usage is around 6 or 7 Gigs. I am running the java JVM with some options but I do not know if any of the options are hurting my server more than helping or if I need other options to increase performance.

System Specs:
-OS: Ubuntu 11.04
-Ram: 8GB (System reads it as 7.6GB)
-Processor: AMD Athlon II X2 250 Processor
-Hard Drive: 74GB Western Digital Raptor 10,000 RPM (I had one lying around)

Current start options:
-server
-Xmx7000M (would setting this to lower than almost full system help or restrict how much the server can keep in memory)
-Xms7000M
-XX:+UseConcMarkSweepGC
-XX:+CMSIncrementalPacing
-XXarallelGCThreads=2
-XX:+AggressiveOpts

Possible Hardware Improvements
I might be upgrading my desktop to solid state and moving two 150GB VelociRaptor 10,000 rpm harddrives in raid 0 to the server. Would that help a more? I might also outright buy an SSD for the server if it comes down to a Harddrive bottleneck.

I know this is long but for anyone that can help me I would really appreciate it.

 

6 or 7 gigs with 6 players?

i would start looking for memory leaks.

 

Read my guide. I think that is what you might need.