At first i thought ReadyBoost means having swap file allocated to flash drive which is wrong because ReadyBoost serves as additional storage for swap file or should i say it mirrors swap file on hard drive and has first priority?
Sorry, but none of the above is true.
What ReadyBoost ("use removable device to improve Windows performance", or whatever the exact wording is) does is to allow SuperFetch, which is the proactive disk caching feature that first showed up in Vista, to use some of the USB device as an addition to - not a mirror of - RAM.
You could view this as a "mirror" of the cached files' contents. Not of RAM, nor of the pagefile. The pagefile will not ever be cached by SuperFetch.
The result is to allow SuperFetch to work well even on systems with limited RAM.
If you're in a situation with not enough RAM (your hard pagefault rate is high), then this will help SuperFetch work better, but that will be its only benefit. Except for a small amount of key system files, SuperFetch's use of RAM is low priority so Windows will not give RAM to SuperFetch when it's needed for other things. The USB storage, on the other hand, can't be used as a replacement for pagefile or RAM space in any other way, so SuperFetch is allowed to use it.
Is SuperFetch important to you? Maybe. It depends mostly on what your file access patterns are like. SuperFetch pre-reads frequently- or recently-used files into available RAM (or, if you enabled ReadyBoost, a USB drive), in case you need them again soon. It even tries to be clever about noticing when you use certain files. Like if it notices that you open your email client at about 8:30 AM every day it will start pre-loading your email files (.PST or .OST or whatever) a few minutes before that.
As for a pagefile - Windows will simply not let you create a pagefile on a USB drive, unless you have some hack in place (or a bug in your USB drive, or in your USB host controller) that fools Windows into thinking the USB drive is non-removeable. You can argue that it ought to let you do that ("I promise, I won't remove it!"), but fact is, it won't. It won't even offer a USB drive in the virtual memory configuration dialog. If you hack it into the registry, it will ignore that setting.
The reason is that, as @foochow mentioned, the pagefile contents are critical to Windows' continued operation. If you did manage to get a pagefile on a removable drive, and it was removed while the OS was running, the OS would crash the moment it tried to read or write to the pagefile.
This concern does not apply to SuperFetch, because there's nothing in the SuperFetch cache that isn't still accessible in the files that SuperFetch is cacheing. If you yank a USB drive that SuperFetch is using, and you later need something from the cached files, it'll just be read from the files.
(This by the way is why we say that SuperFetch doesn't really "use" RAM: The RAM occupied by SuperFetch'd file contents can be immediately released for other, higher-priority uses, just as if SuperFetch had never used it at all. The only bad result is slower access to the formerly-cached content. Therefore the RAM "used" by SuperFetch is still considered part of "Available" RAM on e.g. Task Manager's display.)