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It doubles the THEORETICAL throughput of hte memory. In real life applications, you see maybe 20% -30% increase, maybe more, maybe less. Unfortunately, for dual channel operation, you wont be able to use the 256MB sticks. Personally, 2GB of Dual channel is better than 2 1/2 GB of single channel, you wont really get much from that extra half a gig, and you will gain some performance from dual channel. For Dual channel, put one 1GB stick in the 1st purple, and the other in then 1st green.

Could it not be run with both sets of stick's in Dual Channel?
There is 2 banks , so green/purple together, and then another pair.

It really depends on the motherboard and how/what it will support. My Gigabyte boards will support Dual Channel Memory Mode with different RAM capacities, but yours may not.

To be absolutely certain, your best bet is to download a motherboard manual. It's pretty much standard that the RAM needs to be paired with both 'matched' sticks in the same channel. To insure dual channel memory mode with Gigabyte boards, that means similar sticks (if using 2) either go into slots 1 & 3, or 2 & 4. Yours may require a different placement. If you just have to run all 4 sticks, generally you need to place the slower (higher latency/lower speed) stick in the 1st slot and observe the proper placement of it's mate in the other slot which coincides with the same channel.

Sometimes, mixing vastly different RAM capacities, manufacturers, latencies/timings, etc., will defeat the potential increase that should be realized with the added RAM. Like AW_3_3 said, if your board won't run in Dual Channel Memory Mode with the extra 1/2GB of RAM due to it's 'difference', you're defeating your purpose. A motherboard manual should clarify who, what, when, where, why, and how. Short of that, and email to the computer manufacturer MIGHT shed some light on compatability.

If I owned your computer, I'd remove the 256MB sticks.

As cobra said. In order to run in dual channel, all sticks have to be the Same size, preferably the exact same set. Its the same for me, i cant run 2 512mb sticks and 2 1gb sticks, it will run in single channel.