Difference between DDR2 and DDR3 RAM

How to figure out the type of RAM in your system ?

Well the question is simple and so is the answer(dont try to find it in BIOS) . If you have the catalog of your system then you can refer it to know your RAM type or you can go to your system's manufacturer website to find the answer .
But still the above suggestion will only give tell you weather you have DDR2 or DDR3 RAM in your system .
I was still not satisfied and went a step ahead.
Here is a nice piece of software that gives you details about every hardware installed on your system ranging from processor to RAM to graphics etc . It gives every detail about the hardware profile of your system . The software is called CPU-Z and it can be downloaded from HERE.

What is the difference between DDR2 and DDR3 RAM?

In late 2008, Intel released the first Core i7 processors. These processors were paired with a new motherboard chipset called X58. This chipset introduced the need for a new type of memory called DDR3.
In the last two years the entire industry has converted over to DDR3. All of Intel’s new processors can only be used with a motherboard that requires DDR3. Recent AMD motherboards are also changing over to DDR3.

The term “DDR” stands for Double Data Rate RAM. This term came into use at the turn of the century when the first Double Data Rate RAM modules arrived. Double Data Rate RAM was capable of two data transfers per clock cycle, giving it twice the theoretical peak bandwidth of previous SDRAM while running at the same clock speed.

DDR2 and DDR3 are improvements on the same technology and further increase the number of data transfers per clock cycle. DDR2 RAM provides 4 data transfers per cycle, while DDR3 increases the number to 8. Assuming a base clock speed of 100Mhz, DDR RAM will provide 1600 MB/s of Bandwidth, DDR2 provides 3200 MB/s, and DDR3 provides 6400 MB/s. More is always better!

Here is a table to distinguish the performance.

Specifications
	DDR 2	DDR3
Transfer Speed	400 – 800 Mbps	800 – 1600 Mbps
Voltage	1.8V +/- 0.1V	1.5V +/- 0.075V
Internal Banks	4	8
Prefetch	4bits	8 bits
Termination	Limited	All DQ signals
Topology	Conventional T	Fly-by
CAS Latency	3 – 5	6 – 10
Thermal Sensor	No	Yes (optional)

Source : JDEC standard specification.


However, purchasing DDR2 or DDR3 RAM isn’t usually a matter of preference. DDR2 and DDR3 RAM are not compatible. If your motherboard uses DDR2, you cannot upgrade to DDR3 without upgrading your motherboard. This means that if you currently own a computer with DDR2 RAM and you want to upgrade to a brand new processor and motherboard you have to throw your your perfectly good DDR2 RAM and buy new DDR3 RAM.
In case you have any queries, you can post here in the comments section.