I concur with what FN has posted above, except I would like to clarify the memory options. According to what I see from the it has 4 DIMM sockets arranged in two channels:

The blue colored sockets represent channel 1, the black (or beige in your board) sockets represent channel 2. You can use 1, 2, 3, or 4 total modules, however if you use only 1 or 3 modules some or all of the memory will be running in single-channel (half-speed) mode. The modules installed in an individual channel should match in capacity and voltage (1.8V only in this case), however they don't have to match speed, mfr., etc. as long as they are rated equal to or faster than the 667MHz PC2-5300 speed that the sockets actually run. In otherwords you cold install 800MHz PC2-6400 (or faster) modules, however in this system they will always run at the slower 667MHz PC2-5300 speed.
To upgrade the memory in your system, given that one of the 1GB modules has failed I would recommend installing 3 of these 1GB modules (or similar) along with the remaining good 1GB module for a total of 4GB:
http://www.newegg.com/Product/Product.a ... 6820134634In that case all 4 modules will run at 667MHz even though three of them would be rated for up to 800MHz.
For video I would also recommend a low-power draw card like the HD6450 that FN suggested above. The low-power draw and fanless operation will not require a power supply replacement and will still greatly outperform the integrated video you have now. It will also support multiple displays, including those with DVI and/or HDMI digital connections. Scott.