Memory aka RAM , dimm‘s , SDRAM , DDR , DDR2 etc
Of all upgrade options a memory upgrade is the one with the most noticeable benefits to system performance.
Unless your system already has excess memory then you will almost certainly ‘feel‘ the difference from a boost to your system memory.
Memory can be easily fitted the only thing to worry about is getting the right ‘type‘ of memory , if your computer only accepts DDR memory then you have to upgrade with DDR memory , SDRAM nor DDR2 will simply not fit.
Of buckets and bathtubs
OK , finding a decent analogy to explain the difference between computer memory and computer storage ain‘t easy , but it is all about storage , temporary and permanent.
Your computer has a Hard drive , this is Permanent Storage , all the files and folders you create and save end up on your hard drive , this is the bathtub, the bigger the hard drive the more loofah‘s, soap, bubbles and water you can store in it.
[Hard drive sizes are measured (these days) in Gigabytes (1000 Megabytes) , 80GB would be considered small these days & soon will be hard to get , 160,250,320,400,400, 500+ GB drives are readily available and quite cheap. ]
To fill up the bathtub however (no plumbing in our analogy) we need to transport water & soap somehow to the bathtub , so we use Temporary storage (Memory/RAM) to transport the water into the bathtub.This is your computers memory you fill the bucket , transport it to the bathtub and empty it , the important factor here is that the bigger the bucket , the faster you can fill the bathtub , so if you have 512MB of memory you can fill the bathtub twice as fast as if you only had 256MB.
[Windows 9* can run on as little as 16MB of memory , in reality 64MB was always ‘nice‘ , windows XP requires at least 128MB and again 512MB is ‘nice‘ , these days its quite affordable to stack up on a couple of Gigabytes of memory]
Computer Memory is much more than a transport mechanism , indeed you can run your computer without a hard drive relying totally on the memory assuming you have enough of it , that‘s not practical least of all because when you power down , all the information stored in memory is lost , whereas the information on your hard drive is not.
DDR3
.... is hitting the streets as we write, DDR3 mainboards are now becoming available as is DDR3 memory, currently its quite an expensive option, as always , time will bring the prices down to realistic levels.DDR3 memory is faster that DDR2 memory though current mainboard chipsets do not fully take advantage of this.
Note that DDR3 memory has been available in some graphics chipsets for some time.
DDR2
All modern mainboards use DDR2 memory (beware if that budget system uses DDR ) , its currently cheap and freely available in 256MB , 512MB , 1 and 2 GigaByte forms. DDR2 comes in several frequencies , the common ones being 533 & 667 mhz
DDR
(Actually DDR SDRAM but that‘s a mouthfull)... If you bought your computer before 2007 the chances are it uses DDR memory , DDR memory is still cheap, whilst its possible to buy 128MB units 256MB && 512MB is far more cost effective , 1Gigabyte sticks are available but will not work on ALL motherboards.Note that with DDR you can get memory in different frequencies ( 2700 , 333Mhz , 400Mhz etc ) , its quite safe to put higher frequency memory in a mainboard designed for lower frequencies , but the other way around often leads to sparks and tears !.
SDRAM
Many motherboards still use SDRAM , some motherboards can accept both DDR && SDRAM (though not at the same time) , SDRAM is getting more expensive as less of it is made , 32MB , 64MB , 128MB & 256MB is common , 512MB SDRAM may have issues in some motherboards and is mostly best avoided.Note that with SDRAM (as with DDR memory) you can get memory in different frequencies ( 66Mhz ,100Mhz & 133Mhz ) , its quite same to put higher frequency memory in a mainboard designed for lower frequencies , but the other way around often leads to sparks and tears !.
EDO
I think we can officially & fairly call EDO memory ‘ancient‘ , if your computer uses EDO memory (some transitional motherboards have both EDO and SDRAM slots) then its time to upgrade. (and by upgrade here I mean a major upgrade)
How much is enough ?
Depends, windows XP needs a minimum of 128MB to install yet alone use , 256MB would be the minimum for a comfortable experience , 512MB is nice (and the minimum you should expect in a new system) , windows XP can use > 1GigaByte of memory though in my experience anything over 1GB is wasted since it is rarely if ever used by the operating system , linux users can still feel the difference with > 1GB .
Users of windows 95 , ME and 98 probably with 512MB of memory should be more than happy , these operating systems can run on 16MB of memory & can not use more than a Gigabyte of memory anyway (in reality you wont see any difference after 512MB) .
64 bit versions of XP and Vista can address 16GB of memory without issue. Most 32 bit linux distributions can address 16GB of memory though this sometimes requires kernel recompilation.
Vista
Windows Vista requires 512Mb to be usable (yes I have seen it run on less as well) but 1 GB is Centurions recommended minimum. 2GB appears to be the point where Vista will not have any serious memory related issues, please note however the 4GB limitations of 32bit operating systems as noted above in 'how much is enough'