I offer up the following example:
mean xs = sum xs / length xs
Now try, say, "mean [1.. 1e9]", and watch GHC eat several GB of RAM. (!!)
If we now rearrange this to
mean = (\(s,n) -> s / n) . foldr (\x (s,n) -> let s' = s+x; n' = n+1 in s' `seq` n' `seq` (s', n')) (0,0)
and run the same example, and watch it run in constant space.
Of course, the first version is clearly readable, while the second one is almost utterly incomprehensible, especially to a beginner. (It's even more fun that you need all those seq calls in there to make it work properly.)
The sad fact is that if you just write something in Haskell in a nice, declarative style, then roughly 20% of the time you get good performance, and 80% of the time you get laughably poor performance.
I've written an extended post on how to understand and reliably optimise code like this, looking at it all the way down to the assembly. The result are some simple rules to follow for generated code as good as gcc -O2. Enjoy, http://cgi.cse.unsw.edu.au/~dons/blog/2008/05/16#fast -- Don