All programs, instructions, and data must be stored in system memory before the computer can use it. It will hold recently used programs, instructions, and data in memory if there is room. This provides quick access (much faster than hard drives) to information. The more memory you have, the more information you will have fast access to and the better your computer will perform. Memory is much like the short term memory in your brain. It holds your most recent information for quick access. Just as you want to accurately remember this information in your head, you want your computer's memory to have the correct information as well, or problems will obviously occur. Bad memory is one of the more common causes of computer crashes, and also the most difficult problem to diagnose. Because of this, making sure you get good RAM the first time around is very important.
There are many, many different types of memory for different tasks. The main ones today are DDR PCxx00 SDRAM DIMMs (this includes PC2700, PC3200, etc.) and Direct RDRAM RIMMs
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