"RPM" stands for "Revolutions Per Minute." It refers to how fast a mechanical hard disk's internal platters spin. While faster is usually better in this case, there are good reasons for choosing a 5400 RPM drive.
This slower-spinning drive is popular in laptops because faster platter rotation requires more electricity. Because laptops run on battery power when not plugged into a wall outlet, a slower-spinning drive generally allows you to use the laptop for a longer period of time before the battery drains.
A slower-spinning drive is also a quieter drive, although newer lower-noise 7200 drives can approximate the noise level of their slower cousins.
A faster drive also creates more vibration. This can loosen system screws over time, and higher vibration can have a negative effect on performance, particularly with mechanical SATA drives.
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A higher flow of electricity causes more heat, so a 7200 RPM drive will cause higher system temperatures. This effect can be reduced with proper fan installation and airflow management.
A 7200 RPM drive has more complex circuitry than a comparable 5400 drive, so the faster-spinning drive will be slightly more expensive. The difference is small for an individual user but can be substantial if you are buying a lot for a business.