In this mode, the hard disk is brought to a halt and the screen is blanked. Not much power is saved. With the console blanking feature switched on in the Thinkpad, you'll get the backlight of the LCD switching off too, saving some more power. In this mode, in addition to freezing the hard disk and blanking the screen, the CPU is frozen too. The CPU goes into some power-saving mode, where no processing is done.
RAM just stay frozen where they are.
The system RAM retains its contents, and allows a quick resumption of procession when needed. This is the state the laptop is in when you close its lid. It is better that you have these devices inactive when you suspend your laptop. The suspend mode saves a lot of power, but is not good enough if you really want to freeze a running system for a long time. The suspend mode can hold the system's state for maybe a week on full power, but it needs power for the entire period.