It "works" if your USB memory stick has a faster random-access time than your hard drive. However, in order to be noticeable you'd have to be doing something that does a lot of random cache reads. Typically it is of no benefit whatsoever unless you have an old laptop with a slow hard disk and the bare-minimum amount of RAM (system memory) required by windows.
Increasing the amount of RAM or buying an SSD (sadly this is expensive) will always be superior to using ReadyBoost. However, if you have a very old laptop/netbook that can barely run windows 7 and you are unable/unwilling to upgrade the memory or the disk drive then you *might* see an improvement if you use a large-enough and fast-enough USB memory stick with ReadyBoost.