When you first boot your computer it does a memory check, it should say 262144 bytes if you have 256Mb of RAM. If you don't there it's not an OS problem but rather a problem with your mother board. In linux you can use the command 'dmesg' to display all system hardware properties. try something like:
user@host$ dmesg > dmesg.log
then open the file with your favorite editor and look for a line:
Memory: 157924k/162752k available (1733k kernel code, 4440k reserved, 568k data, 112k init, 0k highmem)
More or less depending on your set up. Thats the one from my machine. A stick of 128MB + a 32MB.
Also try 'free' and/or 'cat /proc/meminfo' to get more information. If this info is wrong and you need to specify the amount of system memory manually you can do so by editing your lilo.conf file, but this is only usually if your using an older machine with EISA RAM. Doing this could really mess up your OS so if this information doesn't help come back and ill tell you how to do that. Also, make sure the RAM is properly seated in the sockets on the Motherboard and check the BIOS to see the maximum memory there. Some motherboards can only handle a certain amount, mine for instance only can handle 512MB.