Does adding more RAM to your computer make it faster?

One topic you might hear people discussing when they're
talking shop about computers is how much random access memory
(RAM) they need to add to their computer. Up to a point,
adding RAM will normally cause your computer to seem faster
on certain types of operations. RAM is important because it
eliminates the need to "swap" programs in and out.

When you run a program such as a word processor or
an Internet browser, the microprocessor in your computer
pulls the executable file (.exe) off the hard disk and loads
it into RAM. Large programs like Microsoft Word or Excel use
large amounts of memory. The microprocessor also pulls in
a number of shared dynamic link libraries (DLLs) -- shared
pieces of code used by multiple applications. The DLLs take
many more megabytes.

Then the microprocessor loads in the data files at which you
want to look, which might total several megabytes if you are
looking at more than one document or browsing a page with
a lot of graphics. So a big application can easily take 100
megabytes of RAM or more, which can slow your system down
significantly if there isn't enough memory. On your machine,
at any given time you might have the following applications
running:

# A word processor
# A spreadsheet
# An e-mail program
# A drawing program
# Three or four browser windows
# A fax program
# A Telnet session

Besides all of those applications, the operating system
itself is taking up a good bit of space. Everything together
may need more RAM than your machine has. Where does all the
extra RAM space come from?