hashCode() purpose in Java

I read in a book that hashCode() shows a memory area which helps (e.g. HashSets) to locate appropriate objects in memory.

No, that's a completely bogus description of the purpose of hashCode. It's used to find potentially equal objects in an efficient manner. It's got nothing to do with the location of the object in memory.

The idea is that if you've got something like a HashMap, you want to find a matching key quickly when you do a lookup. So you first check the requested key's hash code, and then you can really efficiently find all the keys in your map with that hash code. You can then check each of those (and only those) candidate keys for equality against the requested key.

See the Wikipedia article on hash tables for more information.

I like Jon Skeet's answer (+1) but it requires knowing how hash tables work. A hash table is a data structure, basically an array of buckets, that uses the hashcode of the key to decide which bucket to stick that entry in. That way future calls to retrieve whatever's at that key don't have to sift through the whole list of things stored in the hashtable, the hashtable can calculate the hashcode for the key, then go straight to the matching bucket and look there. The hashcode has to be something that can be calculated quickly, and you'd rather it was unique but if it isn't it's not a disaster, except in the worst case (your return 42;), which is bad because everything ends up in the same bucket and you're back to sifting through everything.

The default value for Object#hashCode may be based on something like a memory location just because it's a convenient sort-of-random number, but as the object is shunted around during memory management that value is cached and nobody cares anyway. The hashcodes created by different objects, like String or BigDecimal, certainly have nothing to do with memory. It's just a number that is quickly generated and that you hope is unique more often than not.