I get asked this question frequently or can tell by the way callers and customers are speaking that they don't know the difference between memory or RAM and the hard drive. I've come up with an easy analogy to assist you in understanding the difference between the two and how they are much like the kitchen in your house.
First memory or RAM are the same thing (Random Access MEMORY). Memory for a computer is like the size of your kitchen. The more counter space and floor space in your kitchen the more dishes you can prepare at one time. The same is true for a computer, the more memory you have the more programs you can run simultaneously.
Your hard drive is like the kitchen cabinets. The more cabinets in a kitchen, the more food, pots, and pans you can store away until you need them. Your hard drive stores your programs, Windows (the operating system), pictures, documents, movies, and so on. Its that simple.