Your computer stores data in two places: long-term storage (including hard drives and CD-R/RWs) and short-term memory. Storage devices, such as hard drives, maintain data even when they're turned off. Memory, on the other hand, holds onto its contents only when the computer is on and functioning. RAM chips require power to maintain their content, which is why you must save your data onto disk before you turn the computer off. Turn off your computer, and the data in memory vanishes. Temporary memory is referred to as RAM, or random-access memory.
Every time you start your operating system, launch a program, or open a file, the relevant program code and/or data is loaded into RAM. That's why you see RAM listed in the system requirements for the software you buy. If you have more RAM, you can open more files or programs at once and load bigger files or programs onto your system.
There are many different types of RAM out there. The type of RAM doesn't matter nearly as much as how much of it you've got, but using plain old SDRAM memory today will slow you down. There are main types of RAM: SDRAM, DDR and Rambus DRAM. SDRAM (Synchronous DRAM): SDRAM started out running at 66 MHz, while older fast page mode DRAM and EDO max out at 50 MHz. SDRAM is able to scale to 133 MHz (PC133) officially, and unofficially up to 180MHz or higher. As processors get faster, new generations of memory such as DDR and RDRAM are required to get proper performance. DDR (Double Data Rate SDRAM): DDR basically doubles the rate of data transfer of standard SDRAM by transferring data on the up and down tick of a clock cycle. DDR is a 2.5 volt technology that uses 184 pins in its DIMMs. It is incompatible with SDRAM physically, but uses a similar parallel bus, making it easier to implement than RDRAM, which is a different technology.
Rambus DRAM (RDRAM): RDRAM is a serial memory technology that arrived in three flavors, PC600, PC700, and PC800. PC800...