RAM, also known as random access memory, is a high speed type of memory in which data can be quickly accessed. System RAM these days comes in the DDR3 form factor. Because all data in use on a computer goes in and out of RAM at some point, upgrading both the speed and amount of RAM is one of the most cost effective upgrades that can be made on an computer. With decent kits of 4 GB RAM available for $50 bucks, it can be a cheap way to improve performance.
Most new computers come with 4 GB or more of ram, necessitating a 64 bit edition of the Operating System to take advantage of all the RAM. Systems with less than 4 GB may come with a 32 bit version of the operating system, but this may not always be the case.
Users with an excess of RAM may want to set up a RAM disk as a small and speedy drive for holding game files. More info on what a RAM disk is an how to set one up can be found on the RAM Disk wiki page.