These upgrade cards provide more RAM than the host machine allows. The host machine has an address/memory map built into its ROMs which controls where everything can be in address/memory space. This memory map has no provision for the extra memory that these upgrades provide.
So, the upgrade treats the extra memory as a RAM Disk, without ever being RAM. Then the Virtual software converts the RAM disk into virtual memory. So in a backwards way, the machine sees the extra memory as disk space, then uses a form of virtual memory to treat the disk space as RAM/memory and hence the extra memory is converted into usable memory in a round-a-bout way.