To be specific in this case, Dell is charging you $130 to upgrade from 512MB to 1GB. On NewEgg, you can get 1GB with the same specs from quality manufacturers for less than $100 (Kingston ValueRAM, since that's been mentioned, for $105). That's well less than half price.

Dell themselves will sell you that 1GB of memory separately for $130. That's half price. Basically, that means that they're charging you $65 to plug the additional stick onto the motherboard.

If you want the least price and hassle, order that additional 512MB stick from Dell separately. That way you don't have to deal with reselling the other stick or another retailer. I don't know enough about DDR2 memory to tell you if having matched memory modules is better.