Inactive memory means that the system is caching in RAM information that you were acessing earlier, but not now anymore. If you come back to that information, it'll be accessed really fast, as it's cached on RAM. But it you open an application that will demand more RAM that's free for that moment, the system will dump what's cached in Inactive memory, so you can use that.
Actually, it's there if it's needed. Otherwise, it's the same as FREE memory.