Given that DDR2 is relatively pricey compared to DDR3 these days I don't think I'd bother with 8GB. Although as that price difference will only widen you could also regard this as your last chance to put 8GB in that machine
NB you'd also need to be running 64bit windows to make any use of it. Maybe you already are but even then sinking more money than you have to into a relatively old system doesn't seem worthwhile.
In theory having two sticks of ram give you a performance boost as it allows you to use two memory channels. TBH I've no idea how big that boost is on the system you've got and there's a good chance it would be fairly negligible but I suppose I'd still always want to have it so I'd recommend a two stick option over a single as long as there isn't a big difference in price.
I'd also take the time to work out which of your sticks has failed by testing each on its own and possibly testing both slots on the board separately too. There is still a small chance that errors are being caused by something else in the machine (mobo/psu/cpu) and removing that bad stick will give you a working machine to use in the meantime... keep using a machine that's bluescreening and there's a chance you'll eventually hose your OS.
Of course you could even decide that 2GB of ram is actually enough for you... 4 or 8GB is nice but if you're just web browsing etc it won't make that much difference.