I have two 1GB memory modules in an Acer Aspire E500 Desktop motherboard. Each of the 1GB modules work independently in either slot but the POST only sees 1GB when they're installed together. Any advice? Thanks!

Couple of possible issues. On the Acer Aspire E500 there are 2 slots and they can each hold / use the following memory types:

DDR2 PC2-8500
DDR2 PC2-5300
DDR2 PC2-4200
DDR2 PC2-6400 (with a maximum of 1GB per slot.)

Memory SHOULD work when different sizes and styles are installed. In the real world my experience says "good luck with that." For optimal performance, memory should be installed as identical pairs.

Put in one stick, and go to this web link to get an online test of the exact type of memory: Memory upgrades from Crucial.com - About Crucial:Media Toolbox

Now swap sticks of memory and repeat the test. Do they match?

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Secondly be a limitiation being imposed by the operating system itself

Hey guys, I have the same Acer espire e500 that I only use for music etc now due to its age, but I managed to get a hold of 2 GB ddr2 PC@ 5300 and the PC will not recognise them and now it will only recognise one of the original 512 sticks. I have changed memory plenty of times and am not sure what I could have done or if this old girl is starting to play up?

Any help would be appreciated.