Upgrading memory... what happens??

You don't need to do anything except follow Apple's directions in your owner's manual. You will not lose any files. Make sure you very firmly push in the new RAM and, most importantly, buy RAM from a reputable vendor such as OWC (macsales.com) or Crucial. Both websites will help you figure out the exact specs of your Mac if you need that. OWC's website also has excellent RAM installation videos.

http://support.apple.com/kb/HT1432

Helo Scottbam and welcome to the  forums.

All questions are valid if you don't know the answer.
You won't lose any files if you remove and replace your RAM module, because the modules only hold data temporarily.
When your computer is turned off, the RAM becomes empty.

Your files and other valuable data are stored on your Hard Drive. These won't be disturbed.

Take your time and I wish you success in your RAM upgrade.

You are welcome and thanks for the star! And I can't stress this enough: push it in VERY firmly until you hear a click.