Is there a significant difference between PC2100 512MB or PC2700 512MB?
And also between 256MB PC100 SDRAM and 512MB PC100 SDRAM for games?
I am not certain about performance differences between the 2100 and 2700...
In regards to your second question - the more memory you have the more address spaces you will have for your software applications. To keep it simple:
Everything that happens in your machine requires the cpu to swap things in and out of memory space. Therefore, if you have 256 megs of additional address spaces available, more things can run at the same time.
The easiest and least expensive update you can do (generally speaking) is add memory.