Activity Monitor shows idle memory to be 80% or more

Hi. I'm using a 2009 model MacBook with 4GB of RAM and a 2.4 GHz Core 2 Duo Processor.
I've been having issues for quite a while now where even with just ONE program active, it will often lag, slow WAY down, or even flat out crash. Upon further inspection in the Activity Monitor, I discovered that the vast majority of the computer's memory -- at least 80% and up -- is marked as idle.
First: What does this mean?
Second: Is there any thing that can be done about the stated issues?
Thanks.

This Apple note will help with the definitions of each memory category:  http://support.apple.com/kb/HT1342
See these FAQ to help with stated issues:
http://www.thexlab.com/faqs/performance.html
http://www.thexlab.com/faqs/sbbod.html

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