Don't feel worried if it says that you only have a certain amount of free memory left; only pay attention to the ratio of Page Outs : Page Ins. You can find this easy if you use iStat as a widget.
Whenever your computer pages in, this means that the RAM is being used. Whenever your computer pages out, it is writing to hard disk because the RAM is being too heavily used at that exact moment. Writing to hard disk lowers speed.
I read somewhere that if the ratio of Page Outs : Page Ins exceeds something like 15% then that is an indication that you need more RAM. Having more RAM available will reduce this ratio when doing the exact same task.
However, more RAM makes your computer take slightly longer to start up and shut down. Don't expect it to make applications start up dramatically faster either. It does help your computer multitask a lot better though.