When I started playing SW:Galaxies (MMORPG) I was running a P4 1.8GHz with 512MB of DDR in my Shuttle SB51G. For Christmas last year I got a P4 3.06GHz and another (matching) 512MB DIMM. I was amazed at the difference.
I then put together an AMD box and needed RAM so I pulled one of the 512MB sticks out of my Shuttle and my performance in Galaxies went straight to the crapper, it was like I was still running with my old processor and ram.
I ended up putting the ram back into my shuttle and the AMD box is sitting dead until I can order ram for it.
So, to make a long story even longer...
Yes, ram makes a huge difference, even more so then the processor in many cases.