It's not magic. It's just a filesystem cache. Windows has always had a filesystem cache it's just stored in main memory. All disk reads get cached in main memory. That cache reduces the impact of launching the same application a 2nd time. There was no point paging the filesystem cache out to disk - the reason is obvious.
You misunderstand what ReadyBoost does. It not only speeds up launching the same application a second time (acting as a file cache), but it will speed things up even
the first time you launch your app after you boot your system.
Vista has the SuperFetch service that over time learns the file access patterns of programs, and if you have a flash drive plugged in and ReadyBoost enabled, SuperFetch will
pre-emptively populate the cache with stuff to anticipate what the apps are going to access. Not only that, but since flash is non-volatile, the cache will
persist, so even after you reboot, the system will pick up the file from the flash-based non-volatile cache if it is present.
Also, most flash drives are faster in random access, but slower in sequential access than your hard disk, so ReadyBoost is smart enough to tell when a large sequential I/O comes in, and allow the appropriate device to service it, instead of always going to the flash device.
A flash-backed page file provides
none of these things.