Hardware Secrets posted an interesting article on ReadyBoost feature in Windows Vista. Here's an excerpt:

With 2 GB installed on our system (Core 2 Extreme X6800, ASUS P5B, Samsung SP0411N HDD, MSI GeForce 8800 GTS 320 MB) we saw no performance improvement. We start reading about ReadyBoost on the net and some people are saying that ReadyBoost helps caching the Windows swap file. This file, also known as virtual memory, is used when the CPU needs more RAM memory. When there is no more free RAM, the CPU stores what is in the RAM in this file, freeing up RAM. Since the hard disk drive is slower than RAM, this transition is noticeable by the user. That is why when you install more RAM your system becomes faster: your computer will need to access the swap file less times, as there will be more RAM available.

So we reduced the amount of RAM on our system to 512 MB in order to see what would happen. Loading Photoshop CS2 for the first time took us around 18 seconds without ReadyBoost and then took us 29 seconds with ReadyBoost. So performance decreased – probably because Windows was caching Photoshop files to our pen drive, we thought. Then from the second time we loaded Photoshop on our system took 5:30 seconds to load the program without ReadyBoost while this loading time decreased to 4:40 seconds with ReadyBoost. We gained 1 second, but we keep thinking if it was worth it, as our system delayed a lot more to load Photoshop for the first time.