Apple iMAC G3 266Mhz upgrade

Hello: I just bought an Apple iMAC (266 Mhz) w/ 32Mb PC-66 SO-RAM, 528 L2 Cache. I have been a PC person, but have always wanted to learn more about MACs so that I could add it to my list of skills, since I am already expert on PC networking and support. Anyways, this little iMAC seems to work pretty good, but really has memory problems that I was not expecting, but appear to be normal for the system. I have gone to some of the MAC forums and I have read many complaints about how they handle memory. Basically, I have to continually close down programs, because I will get messages telling me that I need to close other programs in order to open the new one. I have had a 266Mhz PC, and I never had to do that so often, only rarely. What I am thinking of doing is adding new RAM, to upgrade it to 128 or 256Mb. Is someone here experienced with this machine. It's the tray loading G3 type, with OS version 8.51. I am not sure which firmware version. But the system settings say ROM version 1.5, which may refer to something else, I'm not sure. Where do I check? The reason I ask is because someone selling upgrade RAM on eBay told me that I can actually add up to 528 Mb RAM on that system, if I have a firmware upgrade to version 1.2. Thus, I need to figure out what version I have. I have also read in the forums that maybe adding additional RAM can cause the system to be unstable, if I use faster RAM than it is made for (for example PC133, or PC100 RAM). My manual says I need to use (2) PC66 RAM SO-DIMMs. The people trying to sell me new RAM say that I can safely upgrade my system all the way to 528 Mb RAM, and that I can use PC133 and PC100 type (2) x 128Mb or (1) x 256 Mb, in the bottom slot. This conflicts with my manual which says I need PC66, and max RAM upgrade is (2) x 128. This is a rather common computer, I think, so hopefully someone can please advise me on what to do with it. I have Photoshop 4.O and Illustrator on it, which are memory hogs. Anyways, my goal is to try and get rid of having to always shut down programs, and hopefully be able to use Photoshop. I have v4.0, and also a v6.0 upgrade. My last question is in regards to upgrading the OS to version 9.0 or higher. If I get the RAM upgrade, is this computer any good for upgrading to a higher OS version? I understand that I can use virtual PC (I have the software already), and install both. My goal here is not great speed but simply to learn the newer Operating Systems, maybe even OSX. Of course, I am trying to learn all about MACs by going through the learning curve of doing all this stuff, so I am not asking anyone to teach me, but I am only seeking answers to a couple questions regarding whether its practical to spend any money on this machine to upgrade it for my purposes? Or maybe someone has extra RAM they would like to sell me cheap for it? -Dave