On Sun's 1.6 JVM, on a server-class machine (meaning one with 2 CPUs and at least 2GB of physical memory) the default maximum heap size is the smaller of 1/4th of the physical memory or 1GB. Using -Xmx
lets you change that.
Why would you want to limit the amount of memory Java uses? Two reasons.
Firstly, Java's automatic memory management tends to grab as much memory from the operating system as possible, and then manage it for the benefit of the program. If you are running other programs on the same machine as your Java program, then it will grab more than its fair share of memory, putting pressure on them. If you are running multiple copies of your Java program, they will compete with each other, and you may end up with some instances being starved of memory. Putting a cap on the heap size lets you manage this - if you have 32 GB of RAM, and are running four processes, you can limit each heap to about 8 GB (a bit less would be better), and be confident they will all get the right amount of memory.
Secondly (another aspect of the first, really), if a process grabs more memory than the operating system can supply from physical memory, it uses virtual memory, which gets paged out to disk. This is very slow. Java can reduce its memory usage by making its garbage collector work harder. This is also slow - but not as slow as going to disk. So, you can limit the heap size to avoid the Java process being paged, and so improve performance.