Memory is short for "random access memory" and is often abbreviated as "RAM". Everything you do with a computer requires memory to operate. Windows itself requires quite a bit of memory to start up and run smoothly. When you run a program such as Word or Outlook, memory is consumed as long as the program is running. When you close a program, memory is freed up to be used by other programs. Think of memory like your desktop. Not the Windows desktop but your real, physical desktop. The more space you have on your desk, the more  efficiently you can work because you have room to spread out your papers and have space for various tools such as pens, pencils, calculators, scratch pads, etc. Similarly, the more memory a computer has, the more efficiently it will run. Of course in computers, as in the real life desktop, once you have enough space to work efficiently, adding more has little to no benefit. When your computer doesn't have enough memory, Windows resorts to something called virtual memory where it uses free space on the hard disk to supplement memory. This keeps you from getting "out of memory" errors, but is very slow and inefficient. You may sometimes see memory called "physical memory" to distinguish it from virtual memory. Memory chips must be constantly supplied with electricity to hold their data. When you turn your computer off, everything in memory is lost. That is why you must save your work to some mass storage device (typically your hard drive) before shutting the computer down.

Memory chips are soldered onto a small board called a DIMM (SODIMM in the case of laptops) and connected to the motherboard by the long row of gold contacts along its bottom edge. DIMMs and SODIMMs have not changed appearance in many years, but each new generation is different enough that it is not compatible with newer or older generations. The notch in the connectors at the bottom ensures that memory cannot be installed in an incompatible motherboard or installed backwards. The number and location of the notches changes with each generation of memory.

Top: SDRAM DIMM from 1990's and was used on Pentium II and Pentium III era PCs.

Middle: DDR (double data rate) DIMM, used on Pentium III and Pentium 4 era PCs.

Bottom: DDR2 DIMM, used on Pentium 4 and Core 2 based PCs.

Top: SODIMM for a laptop computer

Bottom: DDR DIMM for a desktop PC

   
Here the memory DIMM has been installed on the motherboard. This motherboard has two memory sockets so additional memory could be installed. Newer motherboard usually have four memory sockets allowing memory to be installed in pairs for better performance.