sga stands fro system global area.. which is the part of the oracle instance(includes memory struture and background processes). for faster executon and better performance everthing comes in the sga.

so sga is located in oracle instance,,, which itself consist of two parts.

1>database buffercache: which stores the recently executed database blocks,, when user fires a query oracle  searches that block in dictionary  and stores it into buffer cache.. so if the next time when the user fires the same query ...  users gets output from the buffer cache itself.. no need for parsing again..  only fetch and execute will work.

2> redolog buffer: it stores all the changes made in the database,, and also all DMLs,,  when user fires an commit statement,, lgwr back process writes it into the redolog files.. which can be used for recovery of database during  instance crash .

when u install an oracle in ur machine ,,, system will become slow because of the unstructured sga configuration and also ur system configuration ,  once the oracle instance instants starts .. oracle itself will allocate the space from system .

for example : if u have system confi 512 mb and if will install oracle  with specified sga congi.   obviously system performance will go low.

so in order to increase the system performance,,,  use the system configu  should be well enough to run the oracle instance.... and also allocates  enough space for sga....