Why I Use A RAMdisk Today: Addressing The 32-bit RAM Limit
Currently, I need to run a 32-bit operating system due to compatibility issues with some work software. My computer has much more RAM then Windows XP Professional can see, so I'm stuck with 3gb of physical memory.
When the 3gb wall is hit, then the computer will move to use the pagefile. Luckily, software exists to allow you to create a RAMdisk out of the RAM which is inaccessable to the operating system, in 32-bit environments!
SuperSpeed has a program called RamDisk which will allow you to do this. Another option is the Vsuite Ramdisk software (they both slightly differ - see the features list to see which one meets your needs).
I'm not specifically advertising any software, but those are a few I've come across which allow you to utilize some of the RAM outside of the addressable range of a 32-bit operating system.
While it's not nearly as good as having the OS directly access the RAM, having a RAM-based pagefile is much better than a hard-drive based one.
Scratchfiles - One More Reason (Applies To 64-bit As Well)
One more reason that you can use a RAMdisk is for photo/video editing (e.g. with the Adobe Creative Suite). Most Adobe programs can use a "scratchfile" for temporary storage (similar to a pagefile).
Placing the scratchfile on a RAMdisk would really help to increase the speed of video/photo editing, especially when you're nearing the RAM limits of the operating system (or program-defined maximums).
January 2010 September 2012 Edit:
I recently came across
this website (the patch was removed but I have mirrored it on my website here), which allows you to patch the Windows 7 Kernel to allow the PAE of your operating system to extend the 4gb barrier (see this article mentioned in the previous link for more details on the actual mechanics behind the patch). This allows you to use over 4gb (up to 8gb) of RAM fully under Windows 7 32-bit.