It's not so much that it won't RUN, but that you don't see the increased performance, really above 256MB. The memory code in Win9X differs from the code in NT/2K/XP. The problem was that Windows 9X could only cache up to 256MB of RAM, and for some odd reason, it starts at the end of memory. Therefore, you could actually LOSE performance 'upgrading' from 256MB to 512MB because the Uncached RAM (from 257-512Mb) were being used first. There have been all kinds of workaround attempts for this, but I haven't found one that works for 100% of people 100% of the time other than to go to an NT based OS (2000 or XP) or *nix.
As far as a GPF after installing an additional 512MB, are the memory sticks both of the same brand, Speed/CAS rating, etc? If not, the newer 512MB module may not be able to run as fast as the one you already had in there. Most PC-133 512MB modules that I have seen are only rated CAS3, if you have a 256MB CAS2 module in there, and memory timings set up for it, then you could have problems, including your GPF.
*Deep Breath* (God I'm long winded today...
)
So anyway, post a lil bit more bout your mobo, bios settings, other module, etc and I'm sure we'll be able to help more effectively.
Peace
John