I use a laptop at work, and one at home (this is my own). Both have 2GB of memory, but I use many heavy applications at the same time, so I tried Windows ReadyBoost feature.
ReadyBoost on Vista

On Windows Vista (at work), ReadyBoost tab (on Properties of the USB drive) shows two options. It is recommended to use twice the size of main memory, so 4GB of USB fits perfectly. And actually, 4GB is the maximum size for ReadyBoost anyways.
After start using ReadyBoost, I think the response overall has improved. I'm talking about running 3 Visual Studio instances, Outlook, Word, Firefox, and some other applications at the same time.
ReadyBoost on Windows 7
On Windows 7, you have one more option.
You can dedicate the entire USB drive for ReadyBoost. Because I use this my laptop at home, I don't use so many applications at the same time, so I don't know if this is improving the performance. The benefit may be very slim in this case.
Below is the USB drive I use. 3 pack is a good deal.

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