When OSX is forced to write memory from the RAM to the hard drive, that slows down the performance of the machine (because hard drives are way slower to respond than RAM). This happens more frequently the more you multitask on your machine (keep multiple programs running at once), and when you use large programs that handle large amounts of data (Photoshop, digital video and audio production, etc).
In your Activity Monitor, the Page Ins and Page Outs are reported. What is important is the ratio between the two, not the absolute numbers.
You are aiming for your Page Out number to be about 10% or less of the Page In number. 5% would be ideal. If your Page Outs start creeping above 20% of Page Ins, it means you are regularly overflowing the available RAM, and getting slow downs. Time to consider a RAM upgrade.