Sounds like you maybe hibernated (suspended to disk) with 256MB and, installed 512MB and then brought the machine out of hibernation. In this case it will probably report that c:\hiberfil.sys (and maybe other files) is corrupted because it is - it is a complete memory image dump and if the memory size has changed it is no longer valid and you have to delete it and do a full reboot.
I'm not sure this is the case. If your hibernate dump was corrupted, Windows XP is capable of recovery by deleting the dump upon boot ( i.e. you will be given the option explicitly ). Since the RAM only maintains state, errors pointing to corrupt files ( on DISK) explicitly should be indicative of a different problem. Either way, on Packard Bell PCs of that age, I have an inkling the hibernate function needs to be manually switched on, as it's more commonly used in the context of a laptop lid close.
It's more common your PC will beep furiously on POST if you've got the wrong RAM, or installed incorrectly. Do, however, ensure you've got it clipped right into the motherboard ( using the left and right clip holders fully ).
In terms of your Windows XP Disc, Packard Bell PCs come with either a set of recovery disks ( 2 or 3 of them) or a hidden partition with the option to create them. Upon booting the first disk ( or the DVD ) you should be given the option for a non-destructive restore, whereby only Windows XP files are replaced and your data remains intact.
Using another Windows CD may prove problematic for couple of reasons as your cd-key written on the machine is probably dependant on the specific Windows XP Build ( e.g. Build 2600, 2600 With Service Pack 2, 2600 Including Service Pack 1 )
If you haven't or are currently unable to burn your CDS you can contact with your model number, the will send you recovery CDs for a fee.