I'm not an expert but I think : The site you visit only sees the VPNs info. Which is how you maintain some anonymity while browsing. However, if your VPN keeps logs, then you can still be tracked, just at a different place. Some say they don't keep logs, and you'd have to trust that.
RAM is considered volatile memory, so each time the server turns off, it loses all data. This is compared to disk (hard drives of whatever type) which retain memory even if the server turns off.
In theory, this ram only server prevents them from keeping logs (like which user went where) since the server wouldn't even have a place to store it.
Edit: lustrums post is more accurate and has info that this doesn't prevent logging per se, but could prevent accidental logging. I.e. they can't hire a forensic computer specialist to parse through operating system logs to try to find info they didn't otherwise log elsewhere.