What I am referring as a RAM Drive is http://en.wikipedia.org/wiki/RAM_drive. If I Install Blender on a RAM Drive, would it increase Blender's "speed"? Additionally, since "speed" is a very loose word, it would be nice to also mention 'what' will be faster (e.g. a better GPU will increase cycles render speed, etc.)
Reserving memory for a file system was a good idea 20 years ago.
Modern operating systems use all the available memory that is left by the running processes for caching.
When you start a program the first time it takes longer than subsequent starts because the files and used libraries are still available in RAM. This is the best way because if a process requires more memory cache areas can be evicted. A RAM-disc whereas would statically allocate the memory which might be needed by another process and couldn't be temporarily released.
No, It would harm the overall performance of your system.