I usually tell people to think of an office
Room/environment (operating system)
Office Worker (Processor)(Dual core? a office worker with 2 heads, or 2 office workers?)
Desk or work space (memory)
Filing cabinet (Hard Drive)
Papers/Documents and projects (Programs, services, and other software)
So how many projects or programs you can work on at the same time deppends on how much free space is left on your desk.
MEMORY
How fast you can complete these projects is how fast you can think and act.
PROCESSOR
If you run out of free space on your desktop you have to swap files with your Filing cabinet
PAGING FILE or HD ACTIVITY
What are some other ways to explain what goes on under the hood?