RAM is good. The more RAM the better.
RAM is so important that most of the time we just call it memory. There's lots of different types of memory attached to modern computers. There's hard disk, flash, buffer and cache memories to choose from. The thing is, when you just say “memory” and don't bother to qualify it, you mean RAM. That's how important it is. It doesn't even need the word “the” in front. It's implicit. That's how friggin' important it is.
The main benefits of having more memory is that allows you to use applications that manipulate huge chunks of data all at once.. Programs like this include games, photo editing applications, video editing applications and medical imaging viewers.
Generally you don't need to make the decision to buy more RAM. The applications you're using will do it for you. Essentially, one day you'll see a new, shiny application available for download that you just have to have. You'll download the application, try to run it and and suddenly realize you need more memory.
Windows 7 is the first consumer 64-bit OS from Microsoft that you'd actually want to run and unlike windows XP, it's not limited to 2 (ish) gigs of memory. Expect software developers to take advantage of the new memory situation by making their apps take up more memory (or should I say, "make their apps do something cool". No. No, I shouldn't.)
Curiously, modern operating systems don't just give up or complain when they run out of memory. Instead they will simply cram as much into memory as possible and stick the rest in the pretender-to-the-throne-memory – hard disk. In this case, you know you've run out of memory when your hard drive starts going bonkers and your PC slows down to a crawl. If you're not saving something or loading something your hard drive shouldn't be doing anything. If it is, you may need more memory.
Having more RAM than you need for the applications you run can also speed up the computer. If you have more RAM available than your computer is actually using, the machine will allocate the extra RAM to a disk cache. This is good because it means that even when you're loading something, it won't read it from the hard disk it will just use the copy already in memory. As a result, it loads incredibly fast. In my first article about storage I mentioned that before my solid state drive I used to get more RAM than I really needed. The disk cache is why. If you're too cheap to get an SSD at least max out your system memory. A run of the mill 7200RPM consumer grade hard drive will see huge gains. With a laptop's slow 4200RPM hard disk it's even more important.
(Cute girls know your laptop needs more RAM)
Note that caches work by keeping a copy of the data in memory after it's been read the first time from a hard disk. PCs often read the same things off the hard drive repeatedly due to the way programmers build their applications. The net result of this is that having a disk cache can make a surprising number of things faster.
One last thing, make sure you get your RAM from a reputable brand. Cheap, no name memory may seem like a good deal but there are quite a few bad RAM chips out there. Bad RAM can be a huge pain to diagnose since it just shows up as random crashing - which could be symptoms of almost any problem. A few good brands are Corsair, Kensington and OCZ. There are others..
So, in conclusion: RAM is good. The more RAM the better.
.. and, might I add: get more.