Hi Vinod:
My apologies for not mentioning the version, it is at 10.1.8 
There is 8gbRam and two 3.07ghz processors in the terminal server VM; as for how many users have a PDF open at the same time, I'm not really sure. What makes it harder is that the client is famous for not telling us as soon as the issue arises, and then will say that the problem has been happening for quite awhile which makes it tough to track down! Gotta love end users...haha
Any other suggestions?
Cheers!