- RAM vs. Virtual Memory: When RAM was very expensive, a technology was created called 'Virtual Memory'. The way it works, is that the Operating System (OS) sets a side a chuck of hard drive space, then as the physical RAM gets full it swaps out chunks of memory to the hard drive that are currently not being used. The great thing about this technology is that if you need the extra memory it can be a life saver, but it comes at a cost. It can really slow down your computer, because the OS has to move data in and out of RAM to the hard drive. By purchasing more RAM for your computer you can see an increase in your computer's performance. I would recommend at least a 1GB of RAM for Windows and your applications.
- Fast Hard Drives: One of the slowest components in your computer is your hard drive. The main reason why its slow is that its mechanical. Newer high-performance hard drives on the market, have faster interfaces (i.e.: SATA and SCSI3), large memory caches (i.e.: 8MB or larger), high RPM spindle speeds (i.e.: 10,000 RPM and faster) and access times. If you get a fast hard drive, you should also invest in a fast hard drive controller. If you have at least two hard drives, and the right controller you can create a RAID 0 array which can give you an extra performance boost.
- Faster CPU: Another way to increase your system performance is to install a faster CPU with a large L2 cache on your computer. You need to check if your computer's motherboard can support a faster CPU then the one that is currently installed on it. A faster CPU will let you process more information quickly. Note: If you buy a faster CPU, you might want to also consider buying faster RAM if your motherboard and CPU support it.
- Fast Video Card: If you're a gamer, engineer, or run any application that's used for creating realistic graphics then you might want to consider investing in a fast video card. New video cards are coming out all the time, that are faster and have more features then the previous generation. What you want to consider when buying a new video card is, make sure that it has a fast GPU (Graphics Processing Unit), 128MB or more of fast video RAM, and can use a fast APG or PCI-X slot.
Sometimes, when you change one component in your system, you can have a domino effect where you need to change other components as well. For example, some of the changes listed above could require a new motherboard, or power supply.
If price is a consideration, try buying the previous generation of a technology to get more bang for your buck.