RAM is where your computer stores either the active program(s) it's running, or portions thereof - basically whenever you run a program on your computer, it takes the data from your long-term storage and makes a copy in RAM (or again, a portion of it) which your computer then operates against - basically part of the set of commands your computer can understand is "read/write/delete data from memory at address [x]" where "[x]" is a number that is assigned to a certain part of your RAM - programs will write values into those, and using tons of layers of abstraction, use those numbers to control your computer in the way you want.

When you are using Windows (or Mac OSX), that operating system loads itself into RAM when you turn your computer on, and that program knows how to access your hard drive(s) and pull other programs out and tell your computer how it should run them.