(link to full MS article)
Adding system memory (RAM) is often the best way to improve your PC's performance. More memory means applications can run without needing to access the hard drive.
Windows Vista introduces a new concept in adding memory to a system. Windows ReadyBoost lets users use a removable flash memory device, such as a USB thumb drive, to improve system performance without opening the box. Windows ReadyBoost can improve system performance because it can retrieve data kept on the flash memory more quickly than it can retrieve data kept on the hard disk, decreasing the time you need to wait for your PC to respond. Combined with SuperFetch technology, this can help drive impressive improvements in system responsiveness.
You can remove the memory device at any time without any loss of data or negative impact to the system; however, if you remove the device, your performance returns to the level you experienced without the device. Additionally, data on the removable memory device is encrypted to help prevent inappropriate access to data when the device is removed.
Windows ReadyDrive enables Windows Vista PCs equipped with a hybrid hard disk to boot up faster, resume from hibernate in less time, preserve battery power, and improve hard disk reliability. Hybrid hard disks are a new type of hard disk, with integrated non-volatile flash memory.
The hybrid disk is intended for mobile PCs running Windows Vista. Your data is written to the flash memory, which saves work for the mechanical hard disk—saving the battery power. The hybrid disk helps Windows Vista resume faster from Sleep because data can be restored from flash memory faster than from the mechanical hard disk. And since more data is written to the integrated flash memory than to the traditional hard disk, you have less risk of hardware problems with the hard disk when you're on the move. Windows Vista takes advantage of hybrid hard disk to save battery life, resume use faster from hibernation, and improve reliability.