Eight of these bits together makes a byte, which allows 256 possible combinations (2^8) and is the smallest addressable unit of memory. Each of these combinations represents a single data character or instruction. The ASCII character set actually only uses 7 of these bits, resulting in 128 possible characters. This provides enough room for all 26 English letters (both upper and lower case), digits and special characters. There are also 'double byte' character sets for languages that have a larger number of characters (such as the Far East).

The memory types used in the PC are broadly categorized as either Read Only Memory (ROM) or Random Access Memory (RAM. As the name implies, ROM cannot be updated 'on the fly' but can be read at any time. ROM memory also retains the data even when there is no power applied. On the other hand, RAM can be written to at any time, making it very useful as a temporary storage medium (called system memory) for the operating system and running applications. Unfortunately, RAM does not retain the data when the power is lost so the data must be written to long-term storage (i.e., the hard disk) if it is to be saved. For this reason, RAM is sometimes called 'volatile storage'.

RAM memories are further divided into Static RAM (SRAM) and Dynamic RAM (DRAM). DRAM is relatively slow compared to SRAM because of how it is made. SRAM is composed of logic transistors, with the data being stored in flip-flops. Therefore changing the 'state' of the memory cell and reading the cell are very fast operations. DRAM, on the other hand, uses capacitors to hold the data, which must be recharged (refreshed) fairly frequently due to 'bleed off' and after every read operation because the capacitor is discharged when it transfers it's data. Refresh operations require clock cycles, which may interfere with other operations. While SRAM is up10 times faster than DRAM, it is also much more expensive - in fact, up to 10 times as expensive.