That server has a total of 4 memory slots. The ram must be installed in pairs and you can install a total of 2 pairs (4 sticks). Depending on what is in it now, you could simply add 2GB (2x 1GB stick) if one pair of slots is empty. Or like you said in your question, Yes, you could remove a pair of 512mb sticks and replace with 2x 1GB sticks (or go up to 2x 2GB sticks for 4GB)