There are a number of factors which affect how well a computer performs. One of them is the amount of RAM it has.
When you install a program, it is stored on the hard drive. When you open or run a program, a copy of that program is put into RAM. The CPU can then access the program to run it (by fetching, decoding and executing each program's instructions). These are two areas that increasing or decreasing the amount of RAM can have an impact on.
In an ideal situation, the entire program is put into RAM. If there isn't enough RAM available, however, then some of the hard drive is used as 'pretend RAM' and some of a program you are running is put there. This is far from ideal because hard drives are much slower for the CPU to access compared to RAM, although it does allow you to run more programs.
You can have more than one program at a time in RAM. For example, you will always have an operating system running, but you might also be writing a letter using a word processing application, at the same time have some music playing in the background using a music playing application and perhaps also have a chat program running. Doing lots of different thinfs at (apparently) the same time is known as multi-tasking. It is 'apparently' because the CPU can only actually work on one instruction from one program at any one time. However, because it can do billions of instructions in a second and can switch between applications really quickly, everyhting seems to work at the same time!
Increasing the amount of RAM
You can keep opening as many new programs as you like on a computer. Each time you open one, a little bit more RAM (and 'pretend RAM' on the hard drive) is used and eventually, the computer slows right down. The more RAM you have, however, the more programs you can have open and completely copied in RAM without having to use the hard drive at the same time. One of the easiest ways of improving a computer's performance therefore is to increase the amount of RAM it has. You go to a computer shop and buy another stick of RAM and install it onto the computer's motherboard, or replace an existing smaller stick. The limiting factor of how much RAM you can have, however, is usually the computer's motherboard itself. There will be a fixed number of slots on the motherboard and the slots can only take up to a fixed amount of RAM. This informaiton is in each motherboard's documentation. RAM can also be quite expensive so you need to have the funds to buy more RAM.