Other's haven't had that problem, including OWC, who was the first to claim that model can run 2gb. Either you don't have the upgraded 1ghz model, your logic board has a bad ram slot, or a stick of ram is bad. It's one of the 3. The upgraded model did run 2gb of ram without problems.
The simplest way to tell which model you have is to open up System Profiler and look at your video card. If it's a Radeon 7500 you have the first version 1ghz eMac. If it's a Radeon 9200 you have the second version 1ghz that takes 2gb of ram. Or look at what kind of ram you have, they do not use the same ram. PC133 or PC2700. Is your original stick of 256mb also PC2700, same as the Komputerbay 1gb stick? I've never tried jamming a PC133 or PC2700 into the other's slot to know if it would fit. Mixing two hugely different speeds of ram would likely cause kernel panics and instability.
However, if you read reviews of Komputerbay ram, there are many, many negative reviews saying the ram failed.