ReadyBoost does produce a huge performance increase regardless of how much RAM you have installed in your system. ReadyBoost works by caching frequently used data to the flash memory of the device that is allocated to use ReadyBoost. The ReadyBoost cache works in tandem with the system page file.
The page file in Windows is actually an area of the hard disk that is allocated as if it were RAM. Therefore Windows caches data and runs programs from this allocated area of the hard disk in the same fashion as it does RAM. When ReadyBoost is functioning and enabled (using a fast enough device such as an SDHC ultra Sandisk SD card 15MB/s, or a High performance flash drive), it works with the page file by moving data that otherwise would have been paged to the hard disk to the flash memory device allocated by ReadyBoost.
A larger page file actually degrades performance by forcing the mechanical drive to read and write data more often. We have RAM in our computers because when we launch a program or a file, windows takes the data from the hard drive (program, file, etc) and moves it to RAM, which is where data is traditionally processed from. Use a Sandisk SD 15MB/s card or flashdrive, set your page file to 2GB or more if you want.
Either way, Windows will cache this data to the ReadyBoost cache instead of your hard disk. You will see a huge performance increase. Also, use only 7200 RPM hard drives and the fastest RAM your system supports. As well, it's best to use at least 4GB of RAM.
I have worked with computers for more than 22,000 hours over 6 years. I am a licensed, certified, college educated computer specialist in St. Louis, MO. I hope my explanation helps to clear things up here. A lot of misleading information on the web these days.