The FSB is how fast the processor can talk to the memory in the system. The faster it is, the faster the overall system will perform. If you are running a program, say a DivX or MP3 compressor, the program is continually neededing data to process. If the data it needs is not in the CPU's cache, then it must get it from RAM. When you're dealing with a CPU running, say, 1.7 GHz (my system), and talking to memory at only 266Mhz, you can plainly see the performance bottleneck in all PC's now. And it just gets worse the faster the CPU gets. The new Intel P4 motherboards can do a 533Mhz FSB, using standard DDR266 memory (it uses two chips in parallel).
You could also get a system with RD-RAM (Rambus), but it's much more expensive and not really much faster than the dual-DDR approach.
On a side note, note that RD-RAM is clocked *much* higher than DDR: 800Mhz and 1066MHz. However RD-RAM is only 16-bit, while DDR is 64-bit, so the bandwidth is about equal (DDR400 or dual-DDR200=PC800, dual DDR266=PC1066). Intel's phasing out RD-RAM, so stick with DDR.
Hope that helps and isn't to cryptic!