Before I say anything, this is listed as BETA in red at XDA's site but apparently many people have tested this fix with good results. Let's see what the poster of this post, RyanZA, says about this hack.
Details about what this fix does:
Creates a VIRTUAL EXT2 filesystem inside the stock RFS filesystem on the internal SD card, with a 4KB block size. This means that this lag fix creates a buffer between the real filesystem and the android system. This buffer should reduce the amount of disk I/O required for all operations by utilizing EXT2 buffering, as well as not writing file access times to disk, etc. It allows only 1GB for application data at this stage, down from the 2GB of application data when running stock.
So what is the aim?
Advantages for this fix
Does not require an external SD card.
Allows the external SD card to be removed and reinserted into the device.
Faster speed (Quadrant benchmarks of 2000+ vs 1700 for mimocan's fix)
Possible battery savings, by not requiring the external SD card to be always active.
This looks like a good little hack for your Galaxy S. If you have one and run this app, let us know how it works out for you!