(Extracted from e-mail messages sent during the summer of 2003)
RAM = Random Access Memory. RAM chips are little printed circuit boards (PCB's) that slip into small slots on your computer. If you've ever seen the inside of a transistor radio, or just about anything electronic aside from a toaster, you've probably seen something very roughly akin to a printed circuit board.
As an analogy, your hard disk is like a notebook that you write in. You can use a notebook to jot down letters, shopping lists, phone numbers, and instructions on how to perform certain tasks, or you can use it as a scratch pad for figuring out your taxes. The stuff you put in your notebook is there until you rip out the pages, or erase what you have written. A hard disk can be used the same way. In addition, the hard disk can be used to store a list of instructions telling the COMPUTER how to perform different tasks.
RAM, on the other hand, is more like the short-term memory in most people's heads: It is used primarily for tasks with a more immediate nature. It's faster than the hard disk (just as remembering someone's phone number is usually faster than flipping through several pages in a notebook to find the phone number), but generally holds less information at any given time.
(For now, you can think of a CD as someone else's book: You can buy it and copy passages from it to your notebook / hard disk, or you can memorize portions and use them immediately.)
When you turn on your computer, information on how to display menus on your screen, how to understand the keyboard and mouse, how to communicate with the printer and how to dial out to the Internet, among other things, are read from the hard disk into RAM. Once they're in RAM, then the computer can act on the instructions. (Again, carrying the analogy forward, you can't perform some complex tasks until you've memorized the instructions, which you must first read from your notebook.)
This collection of instructions that handle the screen, keyboard, mouse, modem, printer, and everything else is the Operating System (a.k.a. the OS).
As computers become smaller and cheaper, more brainpower is packed into a smaller space. As a result, programmers create operating systems (and applications) that do more complex tasks -- with any luck, better than previous operating systems and applications. (Microsoft doesn't work that way, in my opinion, but I have a strong anti-monopoly bias, which is why I've used Linux since 1993.)
The more RAM your computer has, the more complex tasks it can juggle simultaneously. Suppose I asked you to recall all the words to a song you heard 30 years ago, then while you were thinking about it, the phone rings, and someone knocks on the door, and you remember that your taxes need to be filed, etc. I don't know about you, but for me, I'd have to ignore something, or risk messing up just about everything.
Computers try -- with varying degrees of success -- to juggle lots at once by effectively putting some tasks on "hold", and writing "reminders" or "bookmarks" to the hard disk. Then, periodically, they read that information back, in effect telling themselves "Oh, yeah. I was in the middle of figuring out taxes and baking a loaf of bread... when I got distracted doing something else," and continuing whatever tasks they left off at. This happens a lot: The computers put things on hold and then continue them several times per minute. A lot like a parent or teacher with several children to take care of at the same time.
Generally speaking three things make your computer more capable of handling complex tasks: The Central Processing Unit (CPU) also known as simply the processor, or microprocessor is the "brain". Better CPU's work faster, and can do more simultaneously. The RAM, as mentioned above is like your memory: The more you have, the less often you have to look at your notebook. The hard disk is like your notebook: The bigger the notebook, the more information you can store in some sort of permanent way. Also, hard disks "spin" inside your computer. The faster they spin, the faster the computer is "turning pages in your notebook" in effect, and so a faster hard disk will help a fast CPU store and retrieve information more quickly.
The operating system is sort of the autonomic nervous system: In us, the autonomic nervous system says "Heart, beat; Lungs, breathe; Eyes, blink; Capilaries, regulate temperature; etc." In computers the operating system (with a little help from something called the Read-Only Memory or ROM) says, "Self-test all the pieces of the computer; Disk, spin; Memory, keep track of what is currently busy; Timer, keep track of time." There's a lot more to it, but think of the OS as something that's always "thinking" in the background even when you're not doing anything on the computer. In a healthy computer, the OS is there almost from the moment you turn the computer on, til you turn it off again.
(Another way to think of the operating system is as a combination traffic cop, hotel booking agent, and librarian: It tells keeps the data flowing smoothly, telling portions of the computer to stop and wait for other busy portions to become available. It keeps track of how much of your disk has been used up, and where the free space is. And it translates file names into a set of coordinates that it then uses to locate the actual file.)
Oh, and a "byte" is like an atom in chemistry. It's not THE smallest building block, but it's "purdy darn close". A "bit" is smaller still but isn't useful for very much on its own. Eight bits together make up one byte. Each byte is a place on the hard disk or in memory (again, think of a notebook, or your own memory) that can hold a code number that the computer interprets either as a character (letter, digit, or punctuation), an instruction telling it to do something, or an address where information is located. Or occasionally, to paraphrase Freud, "Sometimes a number is just a number." I'm simplifying a bit, but again, it should give you more than enough to work with.
Programmers have perverted the metric system a little, and so a kilobyte (KB) is really 1024 bytes -- roughly half a screen of text: between 12 and 13 lines, 80 characters per line. A megabyte (MB) is 1024 kilobytes -- approximately 220 pages of densely-typed, single-spaced text, printed on 8.5 x 11 inch paper. A gigabyte (GB) is 1024 megabytes, which works out to 1024 of those 220-page books. However, the instructions that make up your operating system and the application programs you use amount to several of these very large "books". Each of these can easily be over several hundred megabytes of instructions and data.