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This is what the file is for....
The sysctl.conf is a configuration file for "sysctl" which is an interface for dynamically changing kernel parameters in the Linux OS. The configuration file contains the following elements, vm.min_free_kbytes, vm.dirty_ratio, vm.dirty_backgroud_ratio, vm.vfs_cache_pressure, vm.oom_kill_allocating_task. There are many other elements within the file, but we will be primarily focusing on these specifically (the vm prefix stands for virtual memory). The sysctl.conf file should be located in /etc (/system/etc) by default. To enable it you need your ROM to execute "sysctl -p" somewhere during the boot process (or shortly afterward).
I havent found it in the system/etc/init.d folder on GB/Sense.It is in ICS system/etc./init.d folder though.