I have same setup but with 4400+ processor. I noticed a significant difference when I did it a year or two ago, but it depends what programs you are running. Not worth adding any more RAM as XP 32 bit (which I presume you are running) will only use roughly 3.5GB in practice (4GB max total in theory), and there is the law of diminishing returns.
Once you have installed 1GB your PC will be operating at about it's optimum speed.
However there will be a difference with the extra RAM installed but, it will not be immediately obvious and will only really occur when you are running several applications, at the same time. Which would be unnoticeable unless you had complex Measuring Tools, both before and after.
What you will probably notice though, is that your Hard Drive is not thrashing as often, as it is no longer being required to be used as Virtual RAM.