Life was a lot simpler back in the days when two bits was 25 cents.

Today--at least when you walk into a computer store--you won't find anything under eight bits. And that translates into about $1,800, not $1. And 16 bits? Figure $3,500.

No, these aren't old-fashioned "bits" wildly distorted by the last decade's inflation. They're computer jargon, and what they tell you is a lot about a computer's memory capacity, speed and accuracy.

Chances are you'll hear a lot more about bits in the next year or two if you're shopping for a computer. That's because the latest innovative rage to hit the market is the 16-bit computer.

Right now, most computers are 8-bit--my Apple II Plus, for instance. But the prediction is that, within a few years, most personal computers rolling off the assembly line will be 16-bit. Why? Because 16-bit computers are faster, more accurate, and have larger memory capacities.

Simply speaking, a "bit" is the smallest unit of information storage capability in a computer. It's kind of like a light switch in that the computer "flips" the bit on or off according to an internal code, the position serving as an electronic reminder.

The idea is that, the more of these electronic light switches inside a computer, the more combinations of on-off you end up with and the more information the computer can store. Two bits together, for instance, give the computer four different memory combinations: on-off, off-on, on-on or off-off. A single unit of eight bits gives you 216 combinations. That's a lot of different combinations. And a lot of memory.

Each grouping of bits is called a "byte." An 8-bit computer means that every byte contains eight bits. A 16-bit computer has 16 bits per byte. One other tidbit (no pun intended): An 8-bit computer that is billed as having 64K of memory is one that has just over 64,000 bytes of eight bits each.

What it boils down to is this: unless you're an engineer that needs super accuracy--i.e., you need your calculations to be exact to a whole basket full of zeroes after the decimal point--or you're considering tying together four or more personal computers so that they can pool their memory and calculating power and sages back and forth, you don't have to delay your purchase of a personal computer just so that you can get a 16-bit machine.

Take memory, for instance. More and more programs written for 8-bit computers nowadays are written so that they trick your computer into thinking that it has more memory than it really does. This "virtual" memory--as opposed to real memory--is milked from the system by having the computer monitor how full its real memory is. Then, when it reaches a critical point, the computer transfers internally stored material to your disk drive or tape system and stores it there. When you enter something that calls for information now stored on your disk, the computer simply calls it back.

Speed? That swapping back and forth can slow your machine down a bit, for instance, but rarely is it noticeable. Most of the time, you won't even know the machine is busily shuffling memory between real and virtual. Tie any more than three 8-bit machines together, however, and you'll notice a definite slowdown.