Inspiron 500m memory question

I'm upgrading the memory in a Dell Inspiron 500m notebook. It currently has the original 2 sticks of Infineon PC2100 256mb DDR 266 CL2. I want to use either a single stick of 1GB PC2700 333 MHz DDR 333, or 2 512mb sticks, whichever works best and cheapest.

I tried a Hynix 1 GB SODIMM stick from another notebook, but it won't boot. I swapped in the other notebook's second stick (same), still wouldn't boot on only one. I tried both together, it will now boot, but I get a memory error warning during POST, and vertical lines and graphics breakup as the system boots into Windows.

I switched it back to the original pair of 256's and everything is still OK. Should I be using a pair of 512's to get 1 GB? Is this particular Dell very finicky about what memory it accepts? Will it only take PC2100, or is PC2700 OK? I thought you could always step up to a faster memory, such as going from DDR to DDR2, for example, as long as the card pin layout is the same. It fits the DIMM sockets correctly, and Dell's spec says it can take up to 2 GB, but in what configurations?

 

Computer memory upgrades for Dell Inspiron 500m Laptop/Notebook from Crucial.com

It looks like it hold up to 2gb of PC-2700