The difference between the two type models of SDRAM is really only the bandwidth available. THe more bandwidth you have the more data you can transfer per second. Since the number of transmission lines is constant (64 wires) the only way to get more data down the wires is to make them transmit faster.
DDR 2700 SDRAM transmits data at an effective 333MHz. The 2700 part stands for the amount of bandwidth in bytes, DDR 2700 RAM has a bandwidth of 2700MB/s. DDR 3200 transmits data at an effective 400MHz giving it 3200MB/s of bandwidth.I say effective because DDR memory transmits data twice per clock cycle, effectively doubling its clock cycle. DDR 2700 memory has an effective clock rate of 333MHz, its actual clock rate is 167MHz.
The G5 uses a technique called interleaving to combine the bandwidth of a pair of RAM sticks. A single stick of RAM is like a single lane on a highway, it can only have so many cars per second. Interleaving is like adding a second lane to the highway to increase the number of cars. On the G5 interleaving means DDR 2700 memory has a total bandwidth of 5400MB/s. That is 5.4GB per second. DDR 3200 has a total bandwidth of 6.4GB/s, a whole gigabyte more per second than 2700 memory. Memory bandwidth is very important to a fast processor because it gets data and code to the processor to work on. One of the problems with the current G4 is the paltry amount of bandwidth available to the processor, they can't properly use DDR memory so a DDR 2700 G4 based system has an effective bandwidth of only 1350MB/s, half of the total bandwidth of the memory itself.
On the 1.6 and 1.8GHz G5s the difference in memory will make quite a difference. The speed of the processor will make a difference but the memory bandwidth will be much more of a factor. Programs heavy on memory bandwidth like video editing and gaming will run a bit slower on the 1.6GHz G5. Even if you somehow put a 1.8GHz G5 in that system, the slower memory would still make it slower overall.
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