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From the Microsoft website, although i'd be more interested to hear about real-world experiences, especially from users already with 2.0GB+ of memory :
Windows ReadyBoost
Impromptu memory expansion.
Windows ReadyBoost introduces a new concept in add-on system memory. You can use nonvolatile flash memory devices, such as universal serial bus (USB) flash drives, to improve performance without having to add memory "under the hood." The flash memory device serves as an additional memory cache—that is, memory that the computer can access much more quickly than it can access data on the hard disk drive.
Basically, when your RAM fills up, readyboost will use your flash drive as virtual memory in addition to your hard drive.
While hard drives will almost always have much faster read and write speeds, the reverse is true for flash drives having much faster response times. The flash drive will handle the tiny I/Os much faster than a hard drive would, while leaving the hard drive to take care of large ones the flash drive wouldn't be faster with.
Performance improvements vary greatly depending on the flash drive, what tasks you're doing, and how much RAM your machine already has. Laptops with the RAM hogging vista and only 1GB of RAM see a large boost in performance, while anything with 4GB or more of RAM wont see any improvement.
It's a fairly hotly debated topic how much of a performance boost it is on different systems, but say you have a laptop with 2GB of 667 DDR2 RAM, and you use 4GB of flash memory off of a fairly fast flash drive, you should see some improvement, but it's not like it'll give you a boost comparable to just upgrading your RAM, and you might not even notice it depending on what you use your laptop for.
ReadyBoost is
not the same as virtual memory (aka Windows swap file). ReadyBoost works in conjunction with SuperFetch to "preload" frequently used programs, so they are ready to launch when needed. It is not used when programs run out of physical memory. That is still handled by the swap file on the HDD.
A ReadyBoost drive can be safely removed when the system is running. It will just mean that programs will now need to be loaded from the HDD instead of ReadyBoost. If it was being used as virtual memory, Windows would crash if you accidentally knocked the flash drive out.
And, yes, it is the same as turbo cache, except one is external and the other internal.
No software need. Plug it in and Windows should detect a flash drive. A window should pop up with a few options, one should be something like "Speed up my computer" or maybe "Improve performance". Click it and Windows will test the speed of the flash disk and if it's ok, it'll be enabled. You can set how much space to use on the flash disk for ReadyBoost and how much to leave for other files.
If the Windows doesn't appear, go to Windows Explorer and right click > Properties on the flash disk. Go to the ReadyBoost tab and enable it there.
Problems? See this thread at archive.org.
