Wired = memory that is reserved for critical system processes and will not be swapped at all.
Active = memory that is being used by processes at the current time. Will be swapped to the hard drive only in extreme situations (at which point the system will run like treacle).
Inactive = memory that has been used by processes but is not in current use. It remains in RAM so that it is quicker to access if the application is used again in the future. Will be swapped to the hard drive if other active applications require access to RAM.
Free = memory that isn't being used at all at this time. There is always some small amount left free. No idea why.
Don't worry that you have very little free RAM left - this is normal after a period of use. Only worry if you see excessive swapping of the memory during typical use of your Mac (that is, if you get a lot of paging into and out of the RAM a lot of the time).