Yes, you will see a big difference.
I went from 768 to 1.25 in my PBook and it seems to speed up everything. Just recently my gig stick died and I had to go back to 768 for a week while I waited for a replacement ... it was HORRIBLE. You really get used to the extra speed with multiple aps open.
I wouldn't get that RAM unless it was less than $50 and I was willing to gamble on it. I've had bad luck with no-name or non-certified memory ... sometimes it works, sometimes it doesn't, and sometimes it'll work fine for 2 months and THEN crap out. A brand new stick from crucial (purchased through newegg for less than the original vendor, go figure) only runs about $120, and has warranties etc.