Open Activity Monitor in the Utilities folder. Go to the second tab on the bottom that says "System Memory." How much VM (virtual memory) are you showing? Mine currently says 7.47 GB.
So, no, you don't have enough HD empty space. You're probably seeing a lot of SPUD (spinning beach-ball of Death) when you try to switch between applications, etc. Or, maybe, you're just used to the slow system? Any system instability?
In any case, you should have at least 10% free, and 10 GB would be what I'd say is the minimum.