Most likely your performance is suffering and most likely you need more memory for whatever applications you are running. Swap space is used by the system when processes cannot all be kept in memory, so increasing swap will not free up any more memory. The high disk usage number probably indicates your system is already spending a lot of time swapping - this is very costly.
Depending on the applications you are running (Oracle, for example), you may be able to adjust how much physical memory it uses, but probably at the cost of performance of that app. You might also look at the kernel parameters for buffer cache (dbc_max_pct, dbc_min_pct, bufpages, and nbuf) to see if you are allowing the system to use large amounts of memory for file cache.