how does Scrypt use memory? I saw in some places that Scrypt uses a lot of memory, therefore a good supply of system RAM is needed to hash with it. however, I saw in other places stating that is ONLY uses L2 Memory.
which one does it use?
The amount of memory that scrypt uses can be adjusted to get the desired behavior. If a particular CPU has enough L2 memory to hold all that's needed for a particular scrypt use case, then the performance of system memory will not be relevant. Scrypt-based coins can increase the memory requirements dynamically as one way of increasing the mining difficulty.