PostgreSQL is a pretty powerful database server and will work with almost any settings thrown at it. It is really good at making do with what it has and performing as it is asked.
We recently found this as we were trying to update every row in a table that had over eight million entries. We found in the first few tries that the update was taking over 24 hours to complete which was far too long for an update script.
Our investigation of this led us to the pgsql_tmp folder and the work_mem configuration parameter.