<< First of all the ATI Radeon 8500LE uses 3.6ns memory meaning it can be flashed to the RETAIL verrrry easily. >>
ATi's Radeon8500LE uses 3.6 or 3.8ns DDR SDRAM, and while it can be easily flashed to the Retail version your not guaranteed it will hit the clockspeeds of the Retail board though you do have a good chance as the flash increases the voltage delivered to the DRAM slightly.
As said the Apollo card uses 4.0ns DDR SDRAM, so ATi's own board has slightly better potential overclockability.
Both the Apollo, and ATi's own LE model are clocked at 250/250 by default, so there are no differences in that respect.
Also, ATi manufactures Apollo's Radeon board, it's merely re-sold to Apollo and labeled with their brand name, so visual quality, and quality of manufacture will be identical between the two.
<< Are you saying, as it appears, that there is a limitation in the design itself which prohibits the use of more than 64MB? >>
The R200 core used on the Radeon 8500LE can utilize up to 256MB of DRAM, there are no limitations inherent to the actual core or board design itself that limit it to 64MB. It's more of a case of software not truly needing 128MB, or even 64MB of DRAM very often.
If your running at 1280x1024 or higher with FSAA enabled, then I'd probably go with the 128MB version as long as the cost differential isnt too great.
Future games may take a bit better advantage 128MB, but even so I wouldnt spend the money on it unless the cost differential is reasonably small.
Of course if your doing any reasonable 3D design, CAD, or 3D animation work I would definitely consider the extra DRAM to be worthwhile for many situations.... but then very few home users engage in such activities so that's likely a mute point in this case.
If the price differential isnt much I'd go with ATi's own 8500LE because it's easily flashed to the Retail board, and comes with slightly better DRAM so it may be a bit better overclocker.
If the price difference is fairly significant though then the Apollo board is still a fine choice as it is in most respects identical to ATi's own board.