Since we're all giving explanations I'll try and explain it in a technical way people can understand..
(NOTE: Some things may not be exactly right, I'm trying to keep it extremely simple...)
Everything is text. From text files to Word documents to images to the MSN Messenger executable to what is sent down that modem. You can assume that text is letters of the alphabet, punctuation etc. There are also 31 characters which you cannot 'see' and have special meaning. There are 255 characters in all. I will refer to it as "binary text".
If you open an image file in notepad, you will see binary text.
If you watch what is being sent down your modem, you will see it is simply binary text. There is no magic when it comes to computers, everything can be understood.
Now. Your hard drive stores every file on your computer. And remember, it's simply binary. When you run a program (a .exe) Windows has to read the contents of the file (remember it's all readable bytes (byte = 1 character)) and execute it. Windows can execute the binary, this is how it runs applications.
Right now you're probably looking at this post through your browser. This text you're reading has to be stored somewhere. While it is being stored on your hard-drive for caching purposes, it's actually right this moment in RAM.
RAM can do the same as a hard-drive: store data (binary..). The difference is that it's
very fast to access its data. Also, when you turn off your computer its contents are all deleted. When you close your browser, this text will be removed from RAM as it is unnecessary, you don't need to read this post anymore.
Hmm, well, I tried.. I hope it helps.
Ask whatever questions (directed at the people who learnt something from this) if you want...
