TG Daily tested the new ReadyBoost cache feature in Windows Vista and found out that it does improve performance a bit but in the end it's still better to add some more RAM memory.
Here's a snip:
Although an additional USB 2.0 Flash memory device clearly helps to increase application responsiveness at launch time (we've experienced time savings in this area of up to 50%), upgrading an average computer from 512 MB to at least 1 GB of RAM makes a huge difference. Microsoft may argue that adding a Flash memory stick already has a tremendous impact on subjective performance, reducing application launch times considerably. And that's all true; the performance impact is considerable, but Windows Vista still remains slow in the end.
The performance gain that is achieved from going from 512 MB to 1 GB, which is a very affordable decision nowadays, is absolutely worth the money, even if you have to drag your computer into a local PC store and have service people take care of the upgrade.