Read up a little and it will make sense. It works best with machines that have less than 2GB of memory. Systems with plenty of memory won't see a dramatic improvement but if you're low, say, with just 512mb, a 1GB readyboost stick will make quite a noticable difference. A 2GB machine with the same stick won't see a huge difference -- perhaps slightly faster boot times and a bit more room for superfetch.
To put readyboost into perspective, think of it as an extension of your superfetch cache. If you're hurtin' for more cache, Readyboost is a decent and arguably temporary solution to give a machine a shot in the arm.