While Microsoft does have tools to help tune Web servers for massive amounts of users, it sounds like you're already
familiar with them. You're doing the right thing by isolating Web sites from each other. I would also assume that if you have 4 GB of RAM configured, you're using Windows 2000 Advanced Server and have it configured to take advantage of the maximum 3 GB of RAM. However, IIS is simply not built for this type of environment--it's tuned for smaller amounts of RAM.
I would strongly recommend changing your systems architecture. Generally, it is much more cost effective to deploy multiple, smaller, cheaper Web servers. Start configuring hardware with two-processor Web servers with 1 GB of RAM. Purchase as many of these as necessary to accommodate your user base.
Also, look forward to .Net Server and IIS 6.0. IIS 6.0 includes features that greatly improve the reliability of Web servers operated in your type of environment.
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