in my opinion, a cheap video card would give you better performance by freeing up your system memory (giving you all 256MBs of it), and reducing the load on the CPU. you can buy a cheap video card for about $50 (which is less than you'd pay for 1GB RAM that would just sit in your machine unused)
i say this because you really can't play any games on that setup, so I assume that you use it for web browsing, email, etc. in which case adding 1GB of RAM would not make a big difference in performance because you're not really lacking it to begin with.
in a non-gaming rig, 256MB should be fine. if you do want more then you won't need any more than 512MB (unless you do video editing or 3d modeling) also, you have a single channel RAM limitation due to socket-754, so you would see no benefit with more than 1 stick. a second stick would not get utilized.