A few things which are very very important when it comes to RAM:

Latency and voltage - Even if you buy RAM for a system it still does not mean it will work. Depending on the quality of RAM some may have heat sinks as some may be more generic. Also different RAM chips can have different voltages if the voltages are not set correctly or the timings are off you can have tons of problems. The problems include random blue screens, computer not booting up at all, computer automatically restarting, etc. Solutions include BIOS updates or manually entering the timing and voltage settings provided by the RAM manufacture.

RAM Slot Color - Ram DIMM's (SLOTS) are colored for a reason and depending on the motherboard manufacture the RAM must be installed in certain slots for maximum performance or for the sake of your computer actually booting up. Some motherboards may require you to populate the colored slots first, some may tell you to populate the black slots first, and some may tell you to populate the slots closest to the CPU. Information on this is in the motherboard manual so reading the manual before you install is a must.

Updating RAM - this can be very very complex. Ram is usually bundled as single chips, dual chips, triple chips, quad chips, and six chips. This all depends on the channels so if its DDR2 dual channel you need to install the ram in pairs of 2 DDR3 triple channel need to be installed in pairs of 3. The problem occurs when someone buys DDR3 for example and fills 3 of the 6 RAM slots and down the road wants to buy more RAM to populate all 6 slots. RAM is not made to be mixed and matched and even if you bought the same RAM chips you bought before they are still not technically the "same" even if it's the exact same model. This can lead into problems yet again and computer may not be able to boot up let alone power on. At this point you got two options try different timings and hope it works this is trial and error. You can also return both DDR3 sets to the manufacture for a perfectly matched DDR3 6 chip set for example. The point is to be aware how the chips are sold if u do plan to update RAM in the future sometimes its just best to buy a 6 chip set for DDR3 or a 4 chips set for DDR2 to populate all your RAM DIMM's.

Read The Motherboard Manual - all information is in the manual and it will say the maximum memory your computer can have along with how to correctly install the RAM chips. Also your operating system choice can limit your ram. If your operating system Windows XP for example its 32bit so the limit is 4GB of RAM the calculation for this is actually 2 to the power of 32 which gets you a big number when converted into GB you get 4. Now 64bit systems on the other hand can hold 2 to the power of 64 which is a very very large number which goes in the Exabyte's. So in simple terms if you have 64bit operating system don't worry about reaching the limit.

In the end RAM is great when everything goes well and extremely complex and bad to an average computer user when things go wrong. Motherboards are coming up with new technology to which can set your RAM timings (latency) in a click of a button so things are more user friendly rather than rocket science.

For the last part how much RAM you need depends on what you do but even 4GB of RAM is more than enough 8GB and over is considered overkill right now. There would be very very little difference in performance updating from 4GB to 8GB unless your using autocad along with a lot of graphic programs. So a RAM update is only good if you use it if you're not then there is no value at all.