How do I install pfs3 and why use that instead of SFS?
A few reasons, the main one in your case is that PFS3 will run on any Amiga and SFS requires a 020+. PFS3 is also slightly faster than SFS in the tests I've run. The main archive comes with an AmigaGuide file which should help get you through the installation process, but it's the same as installing any filesystem on a partition once you have the handler installed. Remember the MaxTransfer settings, and check the Mask is right, and use 150 buffers since it seems the minimum recommended for PFS3. Since memory is tight, try not to create too many auto-mounting partitions if you're using PFS3.
There are several advantages to using a replacement filesystem over FFS, speed increase and no disk validation errors are the best ones, but you also get longer filenames and proper undelete ability.
If you want to stick with FFS and just increase the buffers permanently to speed it up a bit, you can change the amount it has in HDToolBox rather than adding the command to the Startup-Sequence.