dwm.exe - This process, which was introduced in Windows Vista, is related to the Desktop Window Manager. When enabled, Desktop Window Manager is responsible for visual effects on the desktop, high resolutions, Aero Glass, 3D window effects and animations, Windows Flip and Windows Flip3D. The process could be disabled through Control Panel, Administrative Tools, under Services, as Desktop Window Manager Session Manager
dwm.exe is the Desktop Window Manager and is responsible for the graphical effects in Microsoft Windows Vista operating system such as 3D effects, live windows previews and windows transparencies.
The Aero interface in Windows Vista can be quite taxing on system performace in certain computers and you can switch it off or reduce the screen resolution to increase performance.