I purchased a stick of 1GB RAM 533. The current RAM i was using was 256mb 533 of RAM. I put the new 1gb RAM into the slot and when i started my pc up it either freezed at the windows loading screen or flashed a blue screen and rebooted my pc.

Can anyone tell me what the problem is here ?

If its an old motherboard it will probably support up to 1gb maximum, spread evenly over all the RAM slots (Ie 2X512mb or 4X256mb etc - you will need to consult your motherboard manual, if you have one).
Or the RAM you bought could be faulty.

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Would it be more efficient and performance benificial to run 2x512mb instead of the 1gb stick ?

If your motherboard supports 1GB the maximum you can run in each slot IS 512mb.

If you don't have a motherboard manual, you will need to find your motherboard model number* and Google search it, that should tell you your maximum RAM limit.

*If you need help finding this post back.

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I Beat Anorexia.

If I have helped you, please consider donating a little cash to Cancer Research UK