What do the different types of memory mean in Activity Monitor?

I am trying to figure out if I need more memory for my MBP. It has 4 gb. When I go to Activity Monitor, I see that there are five different states of memory:

Free
Wired
Active
Inactive
Used

What do these different states mean, particularly Wired and Inactive? I usually have about 100mb free, which seems low to me. addition, what role does the VM size play in the speed of the system? Thanks!