Um, 4 GBs of DDR2 PC6400 costs like $70, and that's 2x2GB too.
But yeah, DDR3 is a definite no, as it's not common even on recent motherboards.
When it comes to memory, your motherboard can typically only use one type of RAM. The different types are usually either DDR, DDR2 or DDR3 if the computer is made within the last 4 years. There are however different speed ratings within these three different types of RAM too. High end DDR2 can be twice as fast as what you got when DDR2 was still new. Regardless of that, any DDR2 will work in a motherboard supporting DDR2, if the RAM is faster than the motherboard can handle, the motherboard will lower the speed of it to the highest it can use.
As for getting a huge speed boost. Large amounts of RAM typically increases speed if you run huge programs, and several of them at the same time. You notice the biggest boost in speed if you have enough RAM to keep more of less all the programs you use in physical RAM all the time. Once the PC needs to swap some of the programs over to virtual memory, you notice a huge drop in performance.
With 4 GB, you should be able to run your system without virtual memory at all if you want (but I would probably still allocate a 500 MB of virtual mem.). With 512 MB, you probably experienced "disk swapping" very often, which would slow your PC down a lot when you multitask. However, if you have a program that already now fit in your physical RAM, and want this particular program to perform faster, more RAM won't help too much, except letting you swap to the other programs faster.
To increase performance in a single program, a faster CPU would help a lot too. With your motherboard you can for example put in an AMD Athlon 64 X2 5000+, which is dual core and runs at 2.600GHz, the price of this CPU is a mere 60 dollars or so. If you want even more power, you can get a AMD Athlon 64 X2 6000+ at 3GHz for about $90, though the 5000+ is more cost efficient, and you probably won't notice an extreme difference in speed.
Both these CPUs, and probably your current CPU can run 64bit operating systems. Even though the limit for RAM is 4 GB in 32bit OSes, you won't get to use all 4 GB of the RAM you plan on buying now. The reason for this is that the limit is on total RAM in the entire computer, not just the amount you put directly into the motherboard. Therefore, if you have a video card with a large amount of video RAM, this amount will also count towards the 4 GB limit, and the system also needs to be able to address other components in your machine than just the RAM. With a 64bit OS, you can however get all of the 4 GB you install, because the maximum amount of memory in a 64bit system is like several thousand gigabytes.
If you want to install a 64bit OS, you have to make sure you can get 64bit drivers for all the components in your PC. 32bit drivers won't normally work. However, 32bit programs will work without problems.
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