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Why is this happening? When I startup the HDA the system uses 21% memory, but as soon as I load up a few torrents in transmission it maxes out. Logically, it seems that transmission is taking all the memory, but I just don't understand why it would use that much.

System Specs:
Pentium D 2.8
4GB DDR3 RAM
60GB HDD (2.5" internal for system)
1TB External USB HDD (formated as ext3 to store movies, music, torrents, etc)
Intel BG945 Video (i think)
Broadcom 57XX NIC

Why is this happening? When I startup the HDA the system uses 21% memory, but as soon as I load up a few torrents in transmission it maxes out. Logically, it seems that transmission is taking all the memory, but I just don't understand why it would use that much.

a couple of things. how are you determining this?

you have to understand that linux uses memory to store data that gets used in memory by applications as "buffers."

for programs that move a lot of data around (e.g. transmission), they will occupy a lot of buffers, which are then kept around, in case they are needed again (transmission does need them some times for seeding). this does not mean the memory is tied up.

you can observer what memory is "tied up" by an app by typing:
and then typing M to sort by memory usage, highest first.

looking at the "RES" (resident memory) will tell you what an app uses in terms of physical memory.

cpg is correct, linux works very different from Windows XP in that respect.

the philosophy is a bit like this: you have bought a system with plenty of ram, why not put the resources to use? So linux will use free memory for caching and other stuff.

with the command "free -m" you can also check how much memory is in use, it will also list swap/virtual memory. When swap goes through the roof (lots of paging) the system is "thrashing", and usually only a reboot will fix that. Most of the times this is caused by a memory leak in an application.

the best test is to actually log on to the system and see if it feels responsive (play a game or something like that). try stopping transmission and see what happens to your memory (it may take a couple of minutes before everything is flushed to disk).