It was magic. I've kept some of the manuals I printed when it was a newborn.
A VAX computer was installed at Berkeley in 1978, but the port of Unix to the VAX architecture, UNIX/32V, did not take advantage of the VAX's virtual memory capabilities. The kernel of 32V was largely rewritten by Berkeley students to include a virtual memory implementation, and a complete operating system including the new kernel, ports of the 2BSD utilities to the VAX, and the utilities from 32V was released as 3BSD at the end of 1979. 3BSD was also alternatively called Virtual VAX/UNIX or VMUNIX (for Virtual Memory Unix), and BSD kernel images were normally called /vmunix until 4.4BSD.
The success of 3BSD was a major factor in the Defense Advanced Research Projects Agency's (DARPA) decision to fund Berkeley's Computer Systems Research Group (CSRG), which would develop a standard Unix platform for future DARPA research in the VLSI Project. CSRG released 4BSD, containing numerous improvements to the 3BSD system, in October 1980.
4BSD (November 1980) offered a number of enhancements over 3BSD, notably job control in the previously-released csh, delivermail (the antecedent of sendmail), "reliable" signals, and the Curses programming library.
http://en.wikipedia.org/wiki/Berkeley_Software_DistributionI practically lived in the computer labs.