As I mentioned before, technically both RAM and hard drive serve as the computer's memory. But think of the RAM as your working desk-space area on your physical desk, and the hard drive as your file drawers.
One more thing you should learn. Your RAM is like Mr. short-term memory in a way.
Let me use Microsoft Word as an example. When your computer is running, it will store information like all the words you copied into your clipboard. It will also store all the words you just typed. And when you press 'save', that's when it will also be copied over into your hard drive.
That's why people tell you to save all the time, b/c if you're typing a 10 page document, but never saved, and your computer crashes or runs out of battery, there's no getting it. Mr. short-term memory has forgotten all of it.
So save often and frequently whenever your doing something important like working out your finances in excel or typing that important letter. Once it's save to the hard drive, it will stay there even when you've turned off your computer.
Now for the nerdy part - there are all sorts of RAM. They are defined by various numbers such as 1GB PC2-5300 667Mhz 200 pin RAM.
The only thing you really need to know is the 1GB. That's the same as 1024 megabytes, just like 1 cm is 10 mms. The numbers that come after that, basically the higher the number, the faster they are.
Once you get advanced enough to upgrade your own RAM yourself and save loads of money from going to Best Buy or Apple, you can just use sites like http://www.crucial.com/ or http://www.oempcworld.com/ to identify exactly the RAM type you need for your laptop or desktop computer. They have online tools that automatically identify the RAM you need for the computer you're currently using to access their website.
Oh, and it probably goes without saying, but laptop RAM is smaller, as just an FYI.
They have online tools that diagnose the computer you're using, and let you know what RAM is compatible.