Swap space is a portion of a computer's hard drive that is used as an extension of its RAM. When the physical memory is full, the operating system moves inactive data from RAM to swap space, freeing up memory for active processes. This helps maintain system performance when running multiple applications. Using swap space can prevent system crashes due to insufficient memory, but it is slower than RAM because accessing a hard drive takes more time than accessing memory. Therefore, while swap space is useful, having enough RAM is essential for optimal performance in computing tasks.