I installed PS CS3 Extended version.

I was working on a project which is 2.000x2.000 resolution.

İmac was suddenly slowing down.I looked the activity monitor.PS was using 628 mb memory.And free memory was 11 mb

I don't know what is the problem.I bought imac(Core 2 duo 1gb ram) for graphical design but it disappointed me

I hope that i am doing something wrong

Photoshop requires 512MB but then you have to consider the amount of extra space (in RAM, that is) that you would need depending on what you are working with. You will probably need more RAM (I recommend you get as much as you can afford) if you are working with such large (probably multi-layered) images.

The blue section of the memory monitor represents the amount of "inactive" RAM in your system. This is RAM that has been reserved but that is basically still free. So you actually have a lot more available RAM than that which is displayed as "free".
I added a snapshot of my system (1,5 GB RAM) running only Thunderbird, Transmission (the torrent client) and Camino. You will notice that my "free" RAM is actually very little but this is absolutely normal with OSX and does not slow down the system.

How about the CPU monitor? If your system is going slow then it may be because another application is eating up all your CPU.

Cheers,

hecker