From LQWiki

Memory, in computing, refers to the non-persistent storage area in a computer. All the programs actively running on your computer use up some of its memory. The operating system (the kernel and any basic services it relies on) also consume memory.

Physical memory means the RAM (Random-Access Memory) installed in your computer. Virtual memory is an extension of physical memory by using the hard disk as a swap space to simulate more RAM in situations where the programs running on the system demand more memory than is actually available. Least recently used "pages" are written to the much slower disk to provide additional RAM that processes need and are read out when called for.

Tips

• On most Linux systems the cat /proc/meminfo command gives a static printout of current memory utilization
• top analyzes and displays continuously updated statistics on current memory usage

related commands

• free -- shows the free memory