One of the main things that determines computer speed is the amount of memory your computer has. By the way, I was hanging around with my wife's cousin this week and he thought computer memory was referring to the amount of storage on a hard drive. So lets get one thing straight, when referring to memory you are talking about RAM (Random Access Memory), not hard drive storage. Back to what I was saying, RAM corresponds to computer speed and that is why people always tell you to upgrade your RAM when your computer is getting old and slow.
When your computer starts to run out of RAM to run programs, it borrows a designated area on your hard drive to swap stuff in and out of memory. This place is called the page file in Windows (Swap partition in Linux). The whole idea is aptly called virtual memory.
Wikipedia says this about Virtual Memory:
Virtual memory is a computer system technique which gives an application program the impression that it has contiguous working memory, while in fact it is physically fragmented and may even overflow on to disk storage. Systems which use this technique make programming of large applications easier and use real physical memory (e.g. RAM) more efficiently than those without virtual memory.
Before running out and dropping a couple of hundo on more RAM to increase performance on your computer, you could try to increase the size of your page file. Here is a video I found on Youtube that tells you how to increase you pagefile size in Windows Vista:
Along with the increase in page file size, you should also regularly defrag your computer, and clean up all of the spyware on it. Doing these things could postpone upgrading your hardware...at least of a little while.