There are lots of ways you can figure out how much swap use in a machine. Common suggestions use formulas based on RAM such as 2 x RAM, 1.5 x RAM, 1 x RAM, .75 x RAM, and .5 x RAM. Many times the formulas are varied depending on the amount of RAM (so a box with 1GB of RAM might use 2 x RAM swap (2GB), while a box with 16GB of ram might use .5 x RAM swap (8GB).
Another thing to consider is what the box will be used for. If you're going to have a huge number of concurrently running processes running on the box, but a significant number of them will be idle for periods of time, then adding extra swap makes sense. If you're going to be running a small number of critical processes, then adding extra swap makes sense (this might seem counter-intuitive, but I'll explain in a minute). If you're running a box as a desktop, then adding extra swap makes sense.
As for whether you should include swap, yes, you should. You should always include swap space unless you really know what you're doing, and you really have a good reason for it.
See, the way the Linux kernel works, swap isn't only used when you have exhausted all physical memory. The Linux kernel will take applications that are not active (sleeping) and after a period of time, move the application to swap from real memory. The result is that when you need that application, there will be a momentary delay (usually just a second or two) while the application's memory is read back from swap to RAM. And this is usually a good thing.
This allows you to put inactive applications to "sleep", giving your active applications access to additional RAM. Additionally, Linux will use any available (unallocated) RAM on a machine as disk cache, making most (slow) disk activity faster and more responsive. Swapping out inactive processes gives you more disk cache and makes your machine overall faster.
Lastly, let's face it, disk space is cheap. Really cheap. There's really no good reason at all not to swipe a (relatively) small chunk of space for swap. If I were running with 2GB - 4GB of RAM in a machine, I'd probably setup my swap space to be at least equal to the RAM. If it were less than 2GB of RAM, then I'd still go with at least 2GB of swap.
UPDATE: As an excellent comment mentioned (and I forgot to include), if you're running a laptop or a desktop that you might want to put in 'hibernate' mode (Suspend to Disk), then you always want at least as much swap as you have memory. The swap space will be used to store the contents of the RAM in the computer while it 'sleeps'.
On hard disks, throughput and seeking is often faster towards the beginning of the disk, because that data is stored closer to the outer area of the disk, which has more sectors per cylinder. Thus, creating the swap at the beginning of the disk might improve performance.
For a 2.6 Linux kernel, there is no performance difference between a swap partition and an unfragmented swap file. When a swap partition/file is enabled by swapon, the 2.6 kernel finds which disk blocks the swapfile is stored on, so that when it comes time to swap, it doesn't have to deal with the filesystem at all.
Thus, if the swapfile isn't fragmented, it's exactly as if there were a swap partition at its same location. Or put another way, you'd get identical performance if you used a swap partition raw, or formatted it with a filesystem and then created a swapfile that filled all space, since either way on that disk there is a contiguous region used for swapping, which the kernel uses directly.
So if one creates the swapfile when the filesystem is fresh (thus ensuring it's not fragmented and at the beginning of the volume), performance should be identical to having a swap partition just before the volume. Further, if one created the swapfile say in the middle of the volume, with files on either side, one might get better performance, since there's less seeking to swap.
On Linux, if the swapfile is created unfragmented, and never expanded, it cannot become fragmented, at least with normal filesystems like ext3/4. It will always use the same disk blocks, which are contiguous.
I conclude that about the only benefit of a dedicated swap partition is guaranteed unfragmentation when you need to expand it; if your swap will never be expanded, a file created on a fresh filesystem doesn't require an extra partition.
Best Answer
The swap = 2 * memory is coming from the old days when during a kernel crash the kernel dumped the memory to the swap device and you were able to check what happened after you rebooted your system. Nowadays for example linux is skipping this at all, and I don't run my system with enabled dump file setup. So, this double the size of the memory to get the swap is not valid anymore, because there is not unusual that you have 16/32/64GB of ram and then you obviously wasting disk space following this old story when the disk was much much bigger then the RAM. So long story short, if you don't want to dump and analyze kernel crashes in production there is no logical reason to keep this principle and just give your system couple of G swap, usually i give 2/4 G, because i want to avoid huge IO load caused by swapping.