I have 7 GB ram in production Box and 850 gb hard drive. What value i need to set for JAVA_OPTS in setenv.bat to get maximum performance.
default vaule of JAVA_OPTS in setenv.bat is
set "JAVA_OPTS=%JAVA_OPTS% -Dfile.encoding=UTF8 -Djava.net.preferIPv4Stack=true -Dorg.apache.catalina.loader.WebappClassLoader.ENABLE_CLEAR_REFERENCES=false -Duser.timezone=GMT -Xmx1024m -XX:MaxPermSize=256m"

Apart from this what are the other configuration[(Default configuration)] i need to change in production box to increase performance.

perhaps you will find this useful

http://www.liferay.com/documentation/liferay-portal/6.1/user-guide/-/ai/performance-tuni-5

There's no predefined "best performance" settings because application server behaves differently and deploy portlets' memory and performance differ.
You'll just have to experiment to obtain the maximum performance. Look at the link Jack provided.