Aright a couple things to clarify for ya. Those difference in colors on your RAM slots are for Dual Channel RAM, you have two have two identicle sticks to be able to run in Dual Channel...and even if you have to identicle sticks sometimes, if it's seperately bought sticks of generic brand it won't work in Dual Channel which is probably what's happening to you and why your computer won't boot up is because the RAM doesn't want to run in Dual Channel. When you see memory that comes in 'kits' like a 1gb kit is 2 sticks of 512mb and it says 'Dual Channel Memory' what it means is those two sticks were specifically designed and tested to be guaranteed to run in dual channel whereas generic RAM is not...
This is going to sound like a stupid question, but are you SURE you don't have two sticks of 256mb because I have never once heard of a computer reading half the capactiy of the sticks, especially a socket 939 motherboard at that...
Also windows based flashing is generally somewhat iffy, but I've done it 5 times in a row within an hour with no problems so it seems like that'd be your best bet, not only that, but I've used MSI's live update and it works.
Your best bet is to not choose 'Automatically Update' or whatever, you need to choose the right BIOS and try an 'Update from File' option so that you actually select the BIOS instead of the computer connecting to the server and downloading a BIOS, this is where most of the windows based flashing goes bad, but if you do it like I said you should have no problems.