Wow - Dell had 19 different models of this one made... but the all seemed to have pretty much the same specs listed...
Basic Model -
Manufacturer : Dell
Model : Inspiron 5000e C500GW
Standard Memory : 32 MB (removable)
Number of sockets for upgrade : 2
Maximum amount of memory : 512 MB
Memory must be installed in set(s) of : 1
Bus Type : PC Card (PCMCIA)
HardDisk Bustype : IDE
CPU : 500MHz Intel Mobile Celeron
Standard Videos : 4 MB SGRAM
Max Video : 8 MB
Video Comments : ATi Rage Mobility w/ 12.1 XGA Active Matrix
HardDisk Comments : 6.0 GB Ultra ATA
Model Comments : 66MHz FSB, Intel Mobile 440 BX chipset
Native OS : Windows 98
Top of the Line Model -
Manufacturer : Dell
Model : Inspiron 5000e R850
Standard Memory : 64 MB (removable)
Number of sockets for upgrade : 2
Maximum amount of memory : 512 MB
Memory must be installed in set(s) of : 1
Bus Type : PC Card (PCMCIA)
HardDisk Bustype : IDE
CPU : 850MHz Intel Mobile Pentium III
Standard Videos : 8 MB SGRAM
Max Video : 16 MB
Video Comments : ATi Rage Mobility 128 3D w/ 14.1 or 15.0 XGA Active Matrix
HardDisk Comments : 5, 10, 20 or 32 GB Ultra ATA hard drive
Model Comments : 100MHz FSB, Intel Mobile 440 BX Chipset
Native OS : Windows 98/ME/2000
In either case, the maximum RAM available is 512MB, as you know. The trick is making sure you have the correct RAM chip, and that it is mounted correctly - in most cases, it's the latter that gets us.
Obviously, one chip mounted okay - the other didn't. This could be (from what you reported) either two things - a bad chip, or it just didn't seat properly. What you might want to do is see which socket is working properly - take one chip out and see what it reports. If you get your 256MBs, swap chips and see if the other reports as well. If it doesn't in the same slot, try reseating it again after wiping the contacts, leaving them moist when reinserting them. If this fails, then you probably have a bad chip.
The second test, if both chips report good, would be to do the same moist insert in the second slot, since this might be a carbon or dust buildup interferring with insertion - remember, if this slot had not been used since the machine was new, its now almost 8 to 9 years old and had lots of time to build up crud inside it.
Good luck!
A-N