PermGen is the space where java stores - if I recall correctly - class file information etc.
To operate liferay you definitely have to tweak that space from the jvm's default - how much you have to tweak it, depends on your installation and what you do with it.
Tomcat as a production server is no problem. If you run into PermGen problems after a few deployments you should
- check the size of your deployments
- check if you really need frequent deployments on a production server - you could restart the server for a new deployment
- provide more permgen space to the jvm
or a combination of all of the above.
I suppose you already googled PermGen and know about the general purpose of this piece of memory.
You can get a lot out of tomcat if you finetune the jvm settings. I can't recommend specific settings, as it completely depends on your specific setup. Just sticking with the default options will give you the default performance, which can be made
a lot better. Michael Han talked about performance tuning on the recent European Symposium. I don't know if the slides are published yet, but you might be able to find some hints there once they are public.