Not to worry. It is a well known bug in NSW 2000 and 2001 . . . it can't handle more than 256 MB of RAM. I keep waiting for a patch, but I guess it ain't coming. I hear the same bug continues in NSW 2002.
Here's a work around you can use. If you have a pair of 256 MB DIMM sticks, pull one . . . test the other. Then swap and you test them both. Replace them both and forever forget about NSW's memory test.