Hi, Tony,
In SVS, it specifically prohibits you from running TSO in a V=R region,
Also, they got rid of "swapping" in the sense of those swap data sets used in OS/360 MVT. Instead, what you do is to reserve a certain percentage of the total paging space for use by TSO. When TSO is inactive, of course batch can also use that page space. Then, when a TSO user goes into a "long wait" their pages are eligible to be "stolen" in the usual way by the paging subsystem, to make room for other pages needed for other TSO users, etc.
Also, you could put certain TSO commands, such as EDIT, in the LPA, so they would be shared by all TSO users.
Hope that helps,
Mark