Personally I'd even re-flash your Bios with the same version if you cannot find an update. Seems something is corrupted. Still possible your ram slots fried, but very unlikely, as that would cause more dramatic issues. The reason for the Bios flash is to see if you can install you memory back in with no faults. If the faults remain, Get a cheap set of 2gig ram. Try it in each of the slots. If they all work, then the older RAM was at fault. If they work in some slots, but not others, then the motherboard is at fault and so on. You have to check things systematically when detecting problems on a PC.
A whole new motherboard would cost only £42 (Need to confirm it works with AMD 64 X2 Dual cores, but I believe it does. AMD make their slots backwardly compatible). This will also work with AM3 chips if you later decide to upgrade your CPU :-
http://www.ebuyer.com/product/181968
A new CPU would cost £56.10 for a Triple core at 3.2 GHZ. That motherboard will also unlock the fourth core for free if it is possible (Worked in my second PC/Wife's).
http://www.ebuyer.com/product/238326